TY - JOUR AU - Kapteyn, Arie AU - Smith, James P AU - van Soest, Arthur AU - Banks, James TI - Labor Market Status and Transitions during the Pre-Retirement Years: Learning from International Differences JF - National Bureau of Economic Research Working Paper Series VL - No. 13536 PY - 2007 Y2 - October 2007 DO - 10.3386/w13536 UR - http://www.nber.org/papers/w13536 L1 - http://www.nber.org/papers/w13536.pdf N1 - Author contact info: Arie Kapteyn University of Southern California Center for Economic and Social Research 635 Downey Way Suite 312 Los Angeles, CA 90089-3332 Tel: 310/448-5383 E-Mail: kapteyn@usc.edu James P. Smith RAND Corporation 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 Tel: 310-451-6925 E-Mail: jsmith_1776@outlook.com Arthur van Soest Tilburg University P.O. Box 90153 5000 LE Tilburg The Netherlands E-Mail: a.h.o.vansoest@uvt.nl James Banks Arthur Lewis Building-3.020 School of Social Sciences The University of Manchester Manchester M13 9PL United Kingdom E-Mail: j.banks@ifs.org.uk M1 - published as Arie Kapteyn, James P. Smith, Arthur van Soest, James Banks. "Labor Market Status and Transitions during the Pre-Retirement Years: Learning from International Differences," in David A. Wise, editor, "Research Findings in the Economics of Aging" University of Chicago Press (2010) M3 - presented at "Economics of Aging", May 11 - December 0, 2007 AB - Many western industrialized countries face strong budgetary pressures due to the aging of the baby boom generations and the general trends toward earlier ages of retirement. We use the American PSID and the European Community Household Panel (ECHP) to explain differences in prevalence and dynamics of self-reported work disability and labor force status. To that end we specify a two-equation dynamic panel data model describing the dynamics of labor force status and self-reported work disability. When we apply the U.S. parameters to the equations for the thirteen European countries we consider, the result is generally that work disability is lower and employment is higher. Furthermore, measures of employment protection across the different countries suggest that increased employment protection reduces reentry into the labor force and hence is a major factor explaining employment differences in the pre-retirement years. ER -