Estimation of a life-cycle model with human capital, labor supply, and retirement

Xiaodong Fan, Ananth Seshadri, Christopher Taber

Research output: Contribution to journalArticleResearchpeer-review


We estimate a life-cycle model of consumption, human capital investment, and labor supply. The interaction between human capital and labor supply toward the end of the life cycle is most novel. The estimates replicate the main features of the data, in particular the large increase in wages and small increase in labor supply at the beginning of the life cycle and the small decrease in wages but large decrease in labor supply toward the end. We show that incorporating human capital is critical when analyzing changes to Social Security.

Original languageEnglish
Pages (from-to)48-95
Number of pages48
JournalJournal of Political Economy
Issue number1
Publication statusPublished - Jan 2024

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