Hours of Work and Retirement Behavior

35 Pages Posted: 21 Jan 2012  

C. Sofia Machado

University of Minho - Economic Policies Research Unit (NIPE)

Miguel Portela

University of Minho; IZA Institute of Labor Economics

Abstract

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.

Keywords: aging, retirement, working hours, older workers

JEL Classification: J14, J26, J22, J21

Suggested Citation

Machado, C. Sofia and Portela, Miguel, Hours of Work and Retirement Behavior. IZA Discussion Paper No. 6270. Available at SSRN: https://ssrn.com/abstract=1989242

C. Sofia Machado (Contact Author)

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

Miguel Portela

University of Minho ( email )

Braga, 4700
Portugal

IZA Institute of Labor Economics

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

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