Validating Life-Cycle Models: Lifetime Earnings and the Timing of Retirement

This paper provides a method for validating, and distinguishing between, different life-cycle models of consumption and labor supply. We derive qualitative predictions for two prominent life-cycle model formulations – having non-separable and separable in consumption and leisure – and we use data on the relationship between lifetime earnings and the timing of retirement to assess and distinguish between them. Preliminary estimates provide some support for the non-separable formulation.