Participation of seniors in the Argentinian labour market: An option value model*

Abstract

Abstract The aim of this article is to define the factors whichdetermine seniors’ decisions to continue to participate in thelabour market in Argentina. An option value model is devel-oped. This model is used to produce estimates based on micro-data drawn from household surveys. These indicate the relativeimportance of the impact of conditions governing eligibility forbenefits on decisions to remain actively employed.Work historyis found to be the main factor in such decisions. Inadequacy ofsocial security benefits and accumulated human capital alsocreate incentives for economic participation in old age. On thebasis of these findings, compensatory policy adjustments, toimprove coverage, increase benefit levels and improve employ-ment conditions for seniors, are proposed. Keywords labour force participation; old age benefit; demo-graphic aspect; flexible retirement; social security reform;Argentina Address for correspondence: Marcelo Alos, San Luis (o) 166, AR-5400 San Juan, Provincia de San JuanArgentina. Email: alosm@georgetown.edu; Ignacio Apella, Guayaquil 51, piso 5° departamento 20,AR-1424 Buenos Aires Argentina. Email: ignacioa@cedes.org; Carlos Grushka, Tucuman 500, AR-1049Buenos Aires, Argentina. Email: cgrushka@safjp.gov.ar; Marcelo Muinos, San Martin 913, AR-1004Buenos Aires, Argentina. Email: mmuinos@nacion-afjp.com.ar.* This article is a shortened version of a report stemming from a research programme carried out by theDivision of Social Programmes of the Inter-American Development Bank (IDB).We would like to thankTomas Engler, Eduardo Ribeiro and the anonymous editors for their valuable comments. The opinionsstated in this document and any errors or omissions are the entire responsibility of the authors and notof the institutions which they represent.