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A Unit Record Analysis of Older Male Labour Force Participation




Type Of Work


  • Scholarly edition

Abstract


  • This paper presents empirical analyses of econometric models of

    older males’ labour force participation based upon the orthodox theory

    of labour supply. The aim is to assess the effectiveness of using of micro

    data to account for older male labour force participation rate patterns

    over recent decades. As such, the influence of financial variables from

    the budget constraint and observable characteristics from the utility

    function are incorporated into reduced form models estimating the older

    male’s expected retirement age and the probability of an older male’s

    labour force participation using unit record data. The research findings

    presented emphasise the role of human capital and potential market wages

    for an older individual’s labour force participation. In contrast, the

    coefficients attached to observable characteristics variables, representing

    tastes and preferences for work and leisure, were rarely statistically

    significant or of a consistent sign across age groups or time periods,

    meaning that that unobservable tastes may dominate the labour force

    participation decision. A major finding was that higher wage earners were

    more likely to anticipate an earlier exit than lower earners. This shows

    that expectations do not necessarily match actual labour force

    participation behaviour, and that lower wage earners may be more

    vulnerable to unanticipated labour force exit. Finally, micro-based

    findings were not adequately translated to the macro level, being unable

    to directly offer inferences for aggregate changes in older male labour

    force participation rates over time. This problem of aggregation results

    in a fallacy of composition in reasoning, meaning that the micro models

    presented have only limited use for explaining older male labour force

    participation rate patterns over recent decades.

Publication Date


  • 2003

Citation


  • O'Brien, M. (2003). A Unit Record Analysis of Older Male Labour Force Participation. Retrieved from http://business.uow.edu.au/econ/who/index.html

Web Of Science Accession Number


Type Of Work


  • Scholarly edition

Abstract


  • This paper presents empirical analyses of econometric models of

    older males’ labour force participation based upon the orthodox theory

    of labour supply. The aim is to assess the effectiveness of using of micro

    data to account for older male labour force participation rate patterns

    over recent decades. As such, the influence of financial variables from

    the budget constraint and observable characteristics from the utility

    function are incorporated into reduced form models estimating the older

    male’s expected retirement age and the probability of an older male’s

    labour force participation using unit record data. The research findings

    presented emphasise the role of human capital and potential market wages

    for an older individual’s labour force participation. In contrast, the

    coefficients attached to observable characteristics variables, representing

    tastes and preferences for work and leisure, were rarely statistically

    significant or of a consistent sign across age groups or time periods,

    meaning that that unobservable tastes may dominate the labour force

    participation decision. A major finding was that higher wage earners were

    more likely to anticipate an earlier exit than lower earners. This shows

    that expectations do not necessarily match actual labour force

    participation behaviour, and that lower wage earners may be more

    vulnerable to unanticipated labour force exit. Finally, micro-based

    findings were not adequately translated to the macro level, being unable

    to directly offer inferences for aggregate changes in older male labour

    force participation rates over time. This problem of aggregation results

    in a fallacy of composition in reasoning, meaning that the micro models

    presented have only limited use for explaining older male labour force

    participation rate patterns over recent decades.

Publication Date


  • 2003

Citation


  • O'Brien, M. (2003). A Unit Record Analysis of Older Male Labour Force Participation. Retrieved from http://business.uow.edu.au/econ/who/index.html

Web Of Science Accession Number