Anne-Line Koch Helsø, UCPH: Modeling retirement with preference heterogeneity


This paper presents an empirical analysis of the effect of economic incentives and attrition on senior workers’ retirement decision, with the main objective to construct a useful tool for policy analysis and forecasting in relation to timing of retirement. We propose and estimate a novel structural retirement model that allows for heterogeneity in leisure preferences on high quality Danish register data. A fixed-grid version of the EM (Expectation Maximization) algorithm provides non-parametric estimates for both the population distribution and individual specific distributions of leisure preferences. These individual-specific parameter distributions prove useful when conducting counter-factual policy experiments and the model succeeds in providing good fits for the actual retirement age distribution.

CCE organizes a weekly seminar, usually on Tuesdays from 13:00 to 14:15. These seminars are open to everyone.  

The seminar covers topics from all research fields in structural econometrics and computational economics including theoretical, empirical, methodological issues.