SMU SOE Seminar (Dec 16, 2019): Occupational Retirement and Social Security Reform: the Roles of Physical and Cognitive Health

Please click here if you are unable to view this page.

TOPIC:

OCCUPATIONAL RETIREMENT AND SOCIAL SECURITY REFORM: THE ROLES OF PHYSICAL AND COGNITIVE HEALTH

ABSTRACT Under skill-biased technical change, jobs are becoming less physically demanding whereas re-quire increasing cognitive abilities. However, existing research pays insuﬃcient attention on the role of cognitive health in retirement, nor on the heterogeneous retirement eﬀects of physical and cognitive health across occupations. Upon motivating facts, this paper proposes and estimates a dynamic structural model of individual retirement and saving decisions. It incorporates both physical and cognitive health and allows their retirement eﬀects to diﬀer across occupations via four channels respectively: disutility of working, wage, medical expenditure and life expectancy. The model is estimated with the U.S. Health and Retirement Study data by Indirect Inference. We ﬁnd cognitive health has little retirement eﬀect for manual workers. However, for clerical workers the eﬀect is as large as physical health. We also reveal the diﬀerent underlying mechanisms through which physical and cognitive health lead to retirement. Our counterfactual experiments ﬁnd, contrary to common concern, manual workers would have larger delay in retirement if retirement age increased. Nevertheless, they would suﬀer larger welfare loss than professionals due to the rigidity of deciding when to retire, especially by interacting with their poorer physical health. Keywords: Cognitive health, cognition, physical health, occupation, retirement, social security, public pension. Click here to view the paper. Click here to view the CV.
		PRESENTER Jiayi Wen Xiamen University
		RESEARCH FIELDS Labor Economics Population Aging Social Security Health Economics Public Economics
		DATE: 16 December 2019 (Monday)
		TIME: 4pm - 5.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903

© Copyright 2024 by Singapore Management University. All Rights Reserved.