Training and Retirement

This paper presents results on the e§ect of formal life-long learningon the decision to retire early. SpeciÖcally, I estimate an Option Valuemodel based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years. Human capital theory predicts that theamount of training and the length of working life will be positivelycorrelated in order to recoup investment and yield a higher return.SigniÖcant upper bound e§ects of training in prolonging working lifeare found for certain types of training and certain groups of workers.However, out-of-sample simulations indicate that on average one yearof training only adds up to one month to the career length. This meansthat training in itself is not enough to substantially prolong careers andincrease the workforce.