Working Paper: NBER ID: w13630
Authors: David E. Bloom; David Canning; Michael Moore
Abstract: We construct a life-cycle model in which retirement occurs at the end of life as a result of declining health. We show that improvements in life expectancy, coupled with a delay in the onset of disability, increases both the optimal consumption level and the proportion of life spent in leisure. The retirement age increases proportionally less than the increase in life expectancy.
Keywords: retirement; life expectancy; health improvements; social security
JEL Codes: D91; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| life expectancy increases (I14) | optimal consumption level increases (D11) |
| life expectancy increases (I14) | proportion of life spent in leisure increases (J29) |
| delay in onset of disability (J14) | optimal consumption level increases (D11) |
| delay in onset of disability (J14) | proportion of life spent in leisure increases (J29) |
| life expectancy increases (I14) | retirement age increases (J26) |
| health improvements (I14) | labor supply decisions affected (J20) |
| rising wages (J39) | length of working life decreases (J29) |
| increased life expectancy (J17) | reduction in contribution rates in social security systems (H55) |
| increased life expectancy (J17) | increase in benefit rates in social security systems (H55) |
| increased life expectancy (J17) | increase in retirement age (J26) |