NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Option Value of Work, Health Status, and Retirement Decisions in Japan: Evidence from the Japanese Study on Aging and Retirement (JSTAR)

Satoshi Shimizutani, Takashi Oshio, Mayu Fujii

Chapter in NBER book Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement (2016), David A. Wise, editor (p. 497 - 535)
Conference held September 26-28, 2013
Published in January 2016 by University of Chicago Press
© 2016 by the National Bureau of Economic Research
in NBER Book Series - International Social Security

This study examines the factors that affect the retirement decisions of the middle-aged and elderly in Japan, focusing especially on their earnings, public pension benefits, and health status. Using two-year panel data from the JSTAR and applying the option value (OV) model proposed by Stock and Wise (1990a, 1990b), we found that the probability of retirement has a negative and significant correlation with the OV of work, and that correlation does not depend on the health status. Our counterfactual simulation based on the OV model shows that if the probability of being enrolled in the disability program were zero, the average years of work when individuals are in their 50s and 60s would increase. However, it should be emphasized that in Japan, where being enrolled in the disability program is unlikely to make one a candidate for the retirement path, the result of this simulation does not indicate that satisfying the eligibility criteria for disability pension receipts will more stringently increase the labor supplied by the middle-aged and elderly.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from Amazon.com

This paper was revised on April 10, 2014

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.7208/chicago/9780226262604.003.0012

This chapter first appeared as NBER working paper w20001, Option Value of Work, Health Status, and Retirement Decisions in Japan: Evidence from the Japanese Study on Aging and Retirement (JSTAR), Satoshi Shimizutani, Takashi Oshio, Mayu Fujii
Users who downloaded this chapter also downloaded these:
Oshio and Oishi Social Security and Retirement in Japan: An Evaluation Using Micro-Data
Yashiro and Oshio Social Security and Retirement in Japan
Horioka, Suzuki, and Hatta w13273 Aging, Saving, and Public Pensions in Japan
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us