The basic aim of this research is to improve understanding of retirement behavior. More specifically, the goal is to provide quantitative estimates of the impact of potential social security reforms on life cycle employment and savings behavior. To accomplish that goal, the proposed research will specify and structurally estimate dynamic models of retirement using the new Health and Retirement Survey (HRS) and incorporating health, mortality, savings, and social security rules. In that context, the specific aims of the project are: (1)to develop and validate methods for solving dynamic optimization models that involve discrete and continuous choice variables and state space elements; (2)to implement a stochastic dynamic model of retirement behavior in which individuals are making employment and savings decisions in a setting that accounts for uncertainty about future wages, future health and survival, and the future generosity of the Social Security System; (3)to develop methods for the validation of survey questions involving subjective expectations about the future environment (constraints) and future choices; (4)to develop and implement methods for the incorporation of data on subjective expectations into the estimation of dynamic models of retirement; (5) to simulate the effect of potential policy changes in social security rules on the savings and retirement decision and on welfare. The proposed research connects two broad areas of research. First, and primarily, it builds on recent empirical studies of retirement behavior, in particular on those adopting dynamic structural approaches. Second, the research contributes to the relatively new and growing literature of empirical studies that make use of subjective expectations.

Agency
National Institute of Health (NIH)
Institute
National Institute on Aging (NIA)
Type
Research Project (R01)
Project #
5R01AG014862-02
Application #
2855845
Study Section
Social Sciences and Population Study Section (SSP)
Project Start
1998-01-01
Project End
2001-12-31
Budget Start
1999-03-15
Budget End
1999-12-31
Support Year
2
Fiscal Year
1999
Total Cost
Indirect Cost
Name
University of Pennsylvania
Department
Miscellaneous
Type
Schools of Arts and Sciences
DUNS #
042250712
City
Philadelphia
State
PA
Country
United States
Zip Code
19104