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Labor Economics

One argument for the decreased labor force participation of older men (especially in the 55-64 age group) is the high generosity of post-retirement health benefits. Assume that the cost of health insurance is fixed during one's retirement years and this is completely covered by a retiree's former employer. Show how this might increase the chance that the worker would retire earlier as compared with the situation where the employee had to pay for his own health insurance.

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