Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85996
Authors: 
Kula, Grzegorz
Year of Publication: 
2003
Series/Report no.: 
Tinbergen Institute Discussion Paper 03-097/3
Abstract: 
This paper focuses on the relation between worker's productivity and retirement decision. Assuming that productivity follows geometric Brownian motion with drift, there exists such a level of productivity for which it is optimal to retire. The worker buys an insurance, which gives a constant income and retirement benefits in exchange for the total output. The level of income and benefits is set to maximize lifetime utility. In such framework we find the retirement threshold of productivity and the probability of retirement.
Subjects: 
retirement
insurance
productivity
JEL: 
E24
G22
J26
Document Type: 
Working Paper

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