Anne-Line Koch Helsø, UCPH: Modeling retirement with preference heterogeneity

Abstract

This paper presents an empirical analysis of the effect of economic incentives and attrition on senior workers’ retirement decision, with the main objective to construct a useful tool for policy analysis and forecasting in relation to timing of retirement. We propose and estimate a novel structural retirement model that allows for heterogeneity in leisure preferences on high quality Danish register data. A fixed-grid version of the EM (Expectation Maximization) algorithm provides non-parametric estimates for both the population distribution and individual specific distributions of leisure preferences. These individual-specific parameter distributions prove useful when conducting counter-factual policy experiments and the model succeeds in providing good fits for the actual retirement age distribution.

CCE organizes a weekly seminar, usually on Tuesdays from 13:00 to 14:15. These seminars are open to everyone.  

The seminar covers topics from all research fields in structural econometrics and computational economics including theoretical, empirical, methodological issues.