Labour supply and employment of older workers: Comments

A key concern of European policymakers is how to raise the labour-force participation of older workers. This is necessary, for example, to guarantee the sustainability of pension systems in many countries – one of the challenges posed by population ageing. Retirement and labour-supply decisions of older workers are core topics in microeconomic research. While there is consensus that economic factors (such as the generosity of early retirement benefits and pensions) play an important role, a crucial role is also played by psychological and social factors (such as quality of work and work satisfaction, social networks and retirement decisions of family members and peer groups). Health also plays a major role, through work disability, chronic diseases (morbidity) or the expected remaining lifetime (longevity). Public policy affects the economic environment under which labour-supply decisions are made, through eligibility rules and levels of state pensions, and through taxation of occupational pensions and other savings.

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