Template-type: ReDif-Paper 1.0
Author-Name: Frimmel, W.
Author-Name: Horvath, T.
Author-Name: Schnalzenberger, M.
Author-Name: Winter-Ebmer, R.
Author-workplace-name: Externe publicaties SBE
Title: Seniority wages and the role of firms in retirement
Abstract: In general, retirement is seen as a pure labor supply phenomenon, but firms can have strong incentives to send expensive older workers into retirement. Based on the seniority wage model developed by Lazear (1979), we discuss steep seniority wage profiles as incentives for firms to dismiss older workers before retirement. Conditional on individual retirement incentives, e.g., social security wealth or health status, the steepness of the wage profile will have different incentives for workers as compared to firms when it comes to the retirement date. Using an instrumental variable approach to account for selection of workers in our firms and for reverse causality, we find that firms with higher labor costs for older workers are associated with lower job exit age.
Series: ROA Research Memoranda
Creation-Date: 20150101
Number: 011
File-URL: https://cris.maastrichtuniversity.nl/ws/files/1080617/guid-f5f1bfef-10d7-4d68-a7cc-d56a6de1b9ba-ASSET1.0.pdf
File-Format: application/pdf
File-Size: 897477
Handle: Repec:unm:umaror:2015011
DOI: 10.26481/umaror.2015011