Option Value Estimation with Health and Retirement Study Data

Andrew Samwick and David A. Wise

in Labor Markets and Firm Benefit Policies in Japan and the United States

Published by University of Chicago Press

Published in print October 2003 | ISBN: 9780226620947
Published online February 2013 | e-ISBN: 9780226620954 | DOI:
Option Value Estimation with Health and Retirement Study Data

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The relationship between retirement and the provisions of Social Security and employer-provided pension plans has been widely studied, and analyses have been based on many different methods. Recently, considerable work has been based on the “option value” model developed by Stock and Wise. This chapter describes initial exploratory work that aims to lead to an option value analysis based on data from the new Health and Retirement Study (HRS). There are three goals. The first is to describe the critical content of the HRS and confirm that these new data are important components of comprehensive analysis of retirement. The second is to make preliminary calculations of pension incentives and to estimate their effect on the probability of retirement. The third goal is to provide guidance that will help analysts in other countries, who may wish to conduct such analyses and indeed may wish to develop HRS-like surveys.

Keywords: retirement; social security; option value analysis; pension incentives

Chapter.  10192 words.  Illustrated.

Subjects: Business and Management

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