A model with leisure production and endogenous retirement is used to explain the
declining labor-force participation rates of elderly males. Using the Health and Retirement Study,
the model is calibrated to cross-sectional data on the labor-force participation rates of elderly
US males by age and their average drop in market consumption in the year 2000. Running the
calibrated model for the period 1850 to 2000, a prediction of the evolution of the cross-section is
obtained and compared with data. The model is able to predict both the increase in retirement since
1850 and the observed drop in market consumption at the moment of retirement. The increase in
retirement is driven by rising real wages and a falling price of leisure goods over time
retirement, leisure, home production, consumption-drop, technological progress
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