The Effect of Retirement Incentives on Retirement Behavior: Evidence from the Self-Employed in the United States and England

44 Pages Posted: 24 Oct 2007 Last revised: 22 Feb 2008

See all articles by Julie M. Zissimopoulos

Julie M. Zissimopoulos

University of Southern California - Sol Price School of Public Policy; The RAND Corporation; University of Southern California - Schaeffer Center for Health Policy and Economics

Nicole Maestas

Harvard Medical School - Department of Health Care Policy

Lynn A. Karoly

RAND Corporation - Santa Monica CA Offices

Date Written: October 2007

Abstract

The authors examine how public and private pension and health insurance systems affect retirement transitions. In many countries, public and private pension eligibility, as well as access to health insurance varies between self-employed and wage and salary workers, and these differences are likely to cause differential retirement patterns both within and across countries. They use the variation in these institutional features within and across the United States and England to analyze retirement patterns. Based on longitudinal data from the Health and Retirement Study (HRS) in the United States and the English Longitudinal Survey of Ageing (ELSA) they find that the higher labor force exit rate of wage and salary workers compared to self-employed workers is due to defined benefit pension incentives created by the public and private pension systems. Higher rates of labor force exit at ages 55 and older in England compared to the United States are due in part to the availability of publicly provided health insurance.

Keywords: retirement, self-employment, health insurance, pensions

JEL Classification: J26

Suggested Citation

Zissimopoulos, Julie M. and Maestas, Nicole and Karoly, Lynn A., The Effect of Retirement Incentives on Retirement Behavior: Evidence from the Self-Employed in the United States and England (October 2007). RAND Working Paper Series No. WR-528, Michigan Retirement Research Center Research Paper No. WP 2007-155, Available at SSRN: https://ssrn.com/abstract=1022430 or http://dx.doi.org/10.2139/ssrn.1022430

Julie M. Zissimopoulos (Contact Author)

University of Southern California - Sol Price School of Public Policy ( email )

Los Angeles, CA 90089-0626
United States

The RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States

Nicole Maestas

Harvard Medical School - Department of Health Care Policy ( email )

180 Longwood Avenue
Boston, MA 02115
United States

Lynn A. Karoly

RAND Corporation - Santa Monica CA Offices ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

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