Type Of Work
- Scholarly edition
A Unit Record Analysis of Older Male Labour Force Participation
Overview
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.
UOW Authors
Publication Date
- 2003
Background
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
Overview
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.
UOW Authors
Publication Date
- 2003
Background
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