Working Paper: NBER ID: w20001
Authors: Satoshi Shimizutani; Takashi Oshio; Mayu Fujii
Abstract: This study examined the factors that affect the retirement decisions of the middle-aged and elderly in Japan, focusing especially on their earnings, public pension benefits, and health status. Using two-year panel data from the JSTAR and applying the OV model proposed by Stock and Wise (1990a, 1990b), we found that the probability of retirement has a negative and significant correlation with the OV of work, and that correlation does not depend on the health status. Our counter-factual simulation based on the OV model showed that, if the probability of being enrolled in the disability program were zero, the average years of work when individuals are in their 50s and 60s would increase. However, it should be emphasized that, in Japan--where being enrolled in the disability program is unlikely to make one a candidate for the retirement path--the result of this simulation does not indicate that satisfying the eligibility criteria for disability pension receipts will more stringently increase the labor supplied by the middle-aged and elderly.
Keywords: Retirement; Health; Pension; Japan; Aging
JEL Codes: H55; I14; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Option Value (OV) (D46) | Probability of Retirement (J26) |
| Probability of Enrollment in Disability Program (H55) | Average Number of Years Worked (J29) |
| Health Status (I12) | Probability of Retirement (J26) |