Retire Later or Work Harder?

35 Pages Posted: 1 Feb 2010

See all articles by David N.F. Bell

David N.F. Bell

University of Stirling - Department of Economics; IZA Institute of Labor Economics

Robert A. Hart

University of Stirling - Department of Economics; Institute for the Study of Labor (IZA)

Abstract

We compare two policies of increasing British state pension provision: (a) increase the pensionable age of men and women, (b) maintain the existing retirement age but require older workers to work longer per-period hours. There are reasons for policy makers to give serious consideration to the under-researched alternative (b). First, from wage - hours contract theory we know that there are potential gains to both workers and firms of allowing hours to rise in work experience. Second, there is strong evidence that job satisfaction rises in age. Third, there has in any case been a significant overall increase in the hours supplied by older workers in the last two decades. We review the relevant theory, model the trade-off between later retirement versus increased work intensity, produce relevant background facts, and provide estimates of the policy trade-offs.

Keywords: older workers, statutory retirement age, hours of work

JEL Classification: H55, J11, J14, J18, J22, J26

Suggested Citation

Bell, David N.F. and Hart, Robert A., Retire Later or Work Harder?. IZA Discussion Paper No. 4720. Available at SSRN: https://ssrn.com/abstract=1545147

David N.F. Bell (Contact Author)

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom
+44 1786 467 486 (Phone)
+44 1786 467 469 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Robert A. Hart

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom
+44 1786 467 471 (Phone)
+44 1786 467 469 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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