Training Background and Early Retirement

Training Background and Early RetirementSeveral studies show that employees with firm-specific skills are more likely to be covered byemployer-sponsored pension schemes than workers with general skills. Therefore it can beexpected that workers with firm-specific skills retire earlier. This paper tests this predictionusing US data from the National Longitudinal Survey of Older Men. We find that workers whoparticipated in firm-specific training in their early careers retire earlier than workers with ageneral training background. This indicates that shared investments in firm-specific trainingare embedded in implicit contracts that induce early retirement. The results remain robustwhen controlling for technological change and work commitment.