Extending working lives: How policies shape retirement and labour market participation of older workers

Abstract

Correspondence Kati Kuitto, Tukkutorinkuja 5, Eläketurvakeskus 00065, Finland. Email: [email protected] Abstract This study investigates how policies shape retirement and labour market participation of older workers and thus help extending working lives. It employs a time-series–crosssection analysis of the effects of macro-level institutional pull, push and retention factors on effective retirement age and employment rate of older workers in 15 OECD countries from 1992 to 2010. The comparative approach reveals that public pension system rules that have been geared towards postponing retirement in many countries in past decades, indeed, are significant determinants of lengthening working lives. In particular, statutory retirement age and financial disincentives for early retirement proof important. Institutional effects differ by gender, though. Furthermore, the results point to the importance of social policies supporting labour market participation throughout the life-course: social investment in human capital and public services clearly supports extending working lives.