Volume 19, Number 4 (Fall) 1984
Leigh, Duane E. 1984. “Why Is There Mandatory Retirement? An Empirical Reexamination.” Journal of Human Resources 19(4):512-531.
A widely cited explanation of mandatory retirement age provisions is the “incentives” model developed and tested by Lazear. The research reported here builds upon Lazear’s empirical framework by adding testable implications drawn from a specific human capital explanation of mandatory retirement. The role of monitoring costs in accounting for mandatory retirement rules is also discussed. The evidence presented, based on data from the NLS mature men sample, indicates that, in addition to the personal characteristics examined by Lazear, a comprehensive explanation of mandatory retirement requires the consideration of both specific human capital and monitoring costs.
The author is Professor of Economics, Washington State University. The helpful comments and criticisms of earlier drafts of this paper by Ben Craig, William Hallagan, Daniel Hamermesh, Masanori Hashimoto, Barry Hirsch, Edward Lazear, Jon Sonstelie, Ronald Warren, and two anonymous referees are gratefully acknowledged.
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