Hours of Work and Retirement Behavior
C. Sofia Machado
University of Minho - Economic Policies Research Unit (NIPE)
University of Minho; Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 6270
Using a novel dataset from the 2006 Portuguese Labor Force Survey this paper examines the impact of a voluntary reduction in hours of work, before retirement, on the moment of exit from the labor force. If, as often suggested, flexibility in hours of work is a useful measure to postpone retirement, then a reduction in working hours should be associated with retirement at later ages. Results prove otherwise suggesting that reducing hours of work before retirement is associated with early exits from the labor force. A reduction in hours of work seems to signal the worker's wish to retire sooner rather than to announce the desire of remaining in the labor market. This result may enclose the need for some alternative policy strategies regarding working hours.
Number of Pages in PDF File: 35
Keywords: aging, retirement, working hours, older workers
JEL Classification: J14, J26, J22, J21
Date posted: January 21, 2012
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