This paper investigates the relation between human capital and retirement when the age of retirement is endogenous. This relation is examined in a life-cycle earnings model. An employee works full time until retirement. The worker accumulates human capital by training- on-the-job and by learning-by-doing. The human capital of an employee is subject to depreciation when knowledge of technologies becomes obsolete. After a shock in technology, the worker depreciates on his human capital. The lower human capital results in a lower life-time income, but also in a lower price of an earlier retirement.

endogenous retirement, human capital, life-cycle models
Human Capital; Skills; Occupational Choice; Labor Productivity (jel J24), Retirement; Retirement Policies (jel J26), Technological Change: Choices and Consequences; Diffusion Processes (jel O33)
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

Alders, P.G.W. (1999). Human Capital and Retirement (No. TI 99-056/3). Tinbergen Institute Discussion Paper Series. Retrieved from