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Did the Elimination of Mandatory Retirement Affect Faculty Retirement Flows?

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  • Orley Ashenfelter
  • David Card
Abstract
A special exemption from the 1986 Age Discrimination Act allowed colleges and universities to enforce mandatory retirement of faculty at age 70 until 1994. We compare faculty turnover rates at a large sample of institutions before and after the federal law change, and at a set of institutions that were covered by earlier state laws prohibiting compulsory retirement. Retirement rates at institutions that enforced mandatory retirement exhibited sharp 'spikes' at ages 70 and 71. About 90 percent of professors who were still teaching at age 70 retired within two years. After the elimination of compulsory retirement the retirement rates of 70 and 71-year-olds fell to levels comparable to 69-year-olds, and over one-half of 70-year-olds were still teaching two years later. These findings indicate that U.S. colleges and universities will experience a rise in the number of older faculty over the coming years. The increase is likely to be larger at private research universities, where a higher fraction of faculty has traditionally remained at work until age 70.

Suggested Citation

  • Orley Ashenfelter & David Card, 2001. "Did the Elimination of Mandatory Retirement Affect Faculty Retirement Flows?," NBER Working Papers 8378, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8378
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    References listed on IDEAS

    as
    1. Courtney Coile & Jonathan Gruber, 2001. "Social Security Incentives for Retirement," NBER Chapters, in: Themes in the Economics of Aging, pages 311-354, National Bureau of Economic Research, Inc.
    2. repec:fth:prinin:448 is not listed on IDEAS
    3. Lumsdaine, Robin L. & Mitchell, Olivia S., 1999. "New developments in the economic analysis of retirement," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 49, pages 3261-3307, Elsevier.
    4. Orley Ashenfelter & David Card, 2002. "Did the Elimination of Mandatory Retirement Affect Faculty Retirement?," American Economic Review, American Economic Association, vol. 92(4), pages 957-980, September.
    5. Orley Ashenfelter & David Card, 2001. "Did the Elimination of Mandatory Retirement Affect Faculty Retirement Flows?," NBER Working Papers 8378, National Bureau of Economic Research, Inc.
    6. Auerbach,Alan J. & Lee,Ronald D. (ed.), 2001. "Demographic Change and Fiscal Policy," Cambridge Books, Cambridge University Press, number 9780521662444, January.
    7. Orley Ashenfelter & David Card, 2000. "How Did the Elimination of Mandatory Retirement Affect Faculty Retirement?," Working Papers 827, Princeton University, Department of Economics, Industrial Relations Section..
    8. Orley Ashenfelter & David Card, 2000. "How Did the Elimination of Mandatory Retirement Affect Faculty Retirement?," Working Papers 827, Princeton University, Department of Economics, Industrial Relations Section..
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    Cited by:

    1. Avner Ahituv & Joseph Zeira, 2011. "Technical Progress and Early Retirement," Economic Journal, Royal Economic Society, vol. 121(551), pages 171-193, March.
    2. Michael Baker & Gary Solon, 2003. "Earnings Dynamics and Inequality among Canadian Men, 1976-1992: Evidence from Longitudinal Income Tax Records," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 267-288, April.
    3. Ashenfelter, Orley & Card, David, 2001. "Did the Elimination of Mandatory Retirement Affect Faculty Retirement Flows?," IZA Discussion Papers 402, Institute of Labor Economics (IZA).
    4. David Neumark, 2003. "Age Discrimination Legislation in the United States," Contemporary Economic Policy, Western Economic Association International, vol. 21(3), pages 297-317, July.
    5. David Card & Michael Ransom, 2011. "Pension Plan Characteristics and Framing Effects in Employee Savings Behavior," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 228-243, February.
    6. John V.C. Nye & Cheryl Litman & Maksym Bryukhanov & Sergiy Polyachenko, 2020. "The Universal Link between Higher Education and Pro-Market Values," HSE Working papers WP BRP 225/EC/2020, National Research University Higher School of Economics.
    7. Orley Ashenfelter & David Card, 2002. "Did the Elimination of Mandatory Retirement Affect Faculty Retirement?," American Economic Review, American Economic Association, vol. 92(4), pages 957-980, September.
    8. Tommaso Agasisti & Aleksei Egorov & Margarita Maximova, 2020. "Do Merger Policies Increase University Efficiency? Evidence From A Fuzzy Regression Discontinuity Design," HSE Working papers WP BRP 226/EC/2020, National Research University Higher School of Economics.

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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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