The Effect of Age and Number of Children on Retirement Decision

This article investigates the effect of age and number of children on retirement, and tries to explain increasing labor force participation rate since the mid-1990’s in the United States. I estimate a life-cycle model to figure out how number and age of children affect the retirement age of parents, and simulate life-cycle paths of the labor force participation rate by using the estimated model. I focus on the labor force participation of two groups of people; one is a group of those who retired before the the mid-1990’s, and the other is a group those who retired after the the mid-1990’s. The simulation results suggest that the change in age and number of children have an effect that the latter group of men retire later than the former group of men do, which indicates older men’s increasing labor force participation rate can be partly accounted for by the change in age and number of children. ∗mailto:[email protected], Ph.D. student at University of Wisconsin-Madison. Office: Social Science 6473