This project analyzes the interrelationships between saving and employment behavior at older ages. The adequacy of saving for retirement is an issue with important implications for government policy. Many households do not accumulate enough wealth to maintain their pre-retirement level of consumption following retirement. This is often asserted to be inconsistent with the implications of forward-looking life cycle models. However, most studies in the retirement-savings literature take the timing of retirement as given, and analyze saving or consumption behavior conditional on retirement. Just as there is wide dispersion in wealth at retirement, there is also wide dispersion in the age of retirement. If patience and preferences for leisure are correlated, and if consumers exercise choice over both retirement and saving, then conditioning on the age of retirement in the analysis of saving behavior could produce misleading inferences. This project will estimate a structural dynamic model of saving and employment behavior in which these decisions are made jointly. There are no published studies that take a structural approach to this problem, yet the payoff of this approach to increasing understanding of the forces leading to the observed extreme heterogeneity of saving for retirement is likely to be quite high.

Agency
National Institute of Health (NIH)
Institute
National Institute on Aging (NIA)
Type
Research Project (R01)
Project #
5R01AG021990-02
Application #
6849692
Study Section
Social Sciences, Nursing, Epidemiology and Methods 4 (SNEM)
Program Officer
Phillips, John
Project Start
2004-02-15
Project End
2008-12-31
Budget Start
2005-01-01
Budget End
2005-12-31
Support Year
2
Fiscal Year
2005
Total Cost
$107,682
Indirect Cost
Name
University of North Carolina Chapel Hill
Department
Miscellaneous
Type
Schools of Arts and Sciences
DUNS #
608195277
City
Chapel Hill
State
NC
Country
United States
Zip Code
27599