Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63123
Authors: 
Iskhakov, Fedor
Year of Publication: 
2008
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2008,03
Abstract: 
A structural dynamic programming model is applied for modeling labour market transitions among older age workers in Norway in 1992-2003. Special attention is given to early retirement pensiion and disability pension as two major exit routes from the labour force. Health status is represented by a latent variable reflecting the eligibility for participating in disability programs. Incomplete information maximum likelihood method is used in several stages to facilitate the estimation. The model is used to investigate the degree of potential substitution of the early retirement and retirement through the disability insurance scheme. Estimates of the structural parameters of the concealed health process allow for forecasting the individual eligibility for the disability and thus facilitate the assessment of the potential substitution between the two exit routes from the labour force. Performed policy simulation of the complete elimination of the early retirement program indicates nearly complete return of th otherwise early pensioners back to the labour market.
Subjects: 
Retirement
health
early retirement
disability
labour market transitions
structural dynamic model
dynamic programming
JEL: 
C61
I10
J22
J26
Document Type: 
Working Paper

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