Optimum Retirement Age
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AbstractThis paper models optimum retirement age by considering both the demand for a human resource (expressed here as the demand for a particular employee A) and the supply of that human resource. Optimal retirement age is obviously a combination of the employer’s offer to employ A and A’s willingness to be employed. These demand and supply sides of the retirement age question will be considered in this paper. However, the emphasis will be on the demand side. The supply side has previously received more attention by researchers [1,6]. The paper uses a classical economic marginal analysis of the retirement age question and begins by assuming a competitive labor market. This assumption is soon relaxed to allow consideration of more realistic possibilities, including imperfect infor¬mation, which may result in exploitation of employees, implicit labor contracts, and the like. Special attention is given to the impact of pension plans on the optimum retirement age.
“This is a post-peer-review, pre-copy-edit version of an article published in "Geneva Papers on Risk and Insurance Theory". The definitive publisher-authenticated version Larsen, N. L. and A. Ralston. "Optimum Retirement Age," The Geneva Papers on Risk and Insurance, 7 (No. 24, July 1982), pp. 191-206. is available online at: http://www.palgrave-journals.com/grir/index.html. Article deposited according to publisher policy posted on SHERPA/ROMEO, 11/26/2010