An optimal retirement problem with job switching and unemployment risks under subsistence consumption constraints
构建了一个包含工作转换机会和生存消费约束的连续时间最优退休模型，分析了失业风险、工作转换和生存消费约束对消费和投资决策的影响，发现生存消费约束和失业风险显著降低了自愿退休前的消费和投资水平。
This study presents for the first time a rigorous continuous-time optimal involuntary and voluntary retirement model that includes job-switching opportunities and subsistence consumption constraints. Two job states are allowed; J1 and J2. Job state J1 provides a higher income but less leisure time than job state J2. We examine the impacts of unemployment risk, job switching, and subsistence consumption constraints on consumption and investment decisions across three potential retirement statuses: voluntary retirement, involuntary retirement in job state J1, and involuntary retirement in job state J2. Using closed-form solutions derived from theoretical models by applying the Martingale approach and variational inequality method validated through comparative statics both analytically and numerically, we analyze how different unemployment possibilities, competitive insurance market conditions, and subsistence consumption levels influence individuals' economic decisions. Our findings indicate that subsistence consumption constraints and unemployment risk significantly reduce consumption and investment levels before voluntary retirement. Moreover, as the probability of unemployment increases, the wealth boundary for voluntary retirement decreases.