Showing papers by "Eric French published in 2001"
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TL;DR: The authors provided an empirical analysis of the effects of employer-provided health insurance, Medicare, and Social Security on retirement behavior using data from the Health and Retirement Study, using a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses.
Abstract: This paper provides an empirical analysis of the effects of employer-provided health insurance, Medicare, and Social Security on retirement behavior. Using data from the Health and Retirement Study, we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses. Our results suggest that Medicare is important for understanding retirement behavior, and that uncertainty and saving are both important for understanding the labor supply responses to Medicare. Half the value placed by a typical worker on his employer-provided health insurance is the value of reduced medical expense risk. Raising the Medicare eligibility age from 65 to 67 leads individuals to work an additional 0.074 years over ages 60-69. In comparison, eliminating two years worth of Social Security benefits increases years of work by 0.076 years.
80 citations
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TL;DR: The authors assesses whether these anecdotes represent isolated incidents or whether the stock market has significantly affected U.S. labor supply and conclude that the latter is more likely to be the case.
Abstract: There are many anecdotes of people who quit their job after having their stock market wealth increase dramatically. This article assesses whether these anecdotes represent isolated incidents or whether the stock market has significantly affected U.S. labor supply.
65 citations
TL;DR: This paper showed that both work hours and wages drop sharply at ages 62 and 65, and that these sharp drops in work hours cause a drop in wages for men, although they find little evidence for a similar effect among women.
Abstract: This paper presents estimates of the part-time wage effect. It also shows that failure to account for the part-time wage effect leads to a downward biased estimate of labor supply elasticities of interest. Using three different datasets, we show that both work hours and wages drop sharply at ages 62 and 65. The Social Security rules produce strong incentives to reduce work hours at these ages. We present evidence that these sharp drops in work hours cause a drop in wages for men, although we find little evidence for a similar effect among women. Estimates indicate that, holding all else equal, cutting the workweek from 40 to 20 hours results in roughly a 25 percent wage penalty for male workers at these older ages. Given these estimates, the labor supply response to a tax change, for example, is downward biased by about 26 percent.
7 citations