Working Life: Labour Supply, Ageing and Longevity


The labour supply of older workers is set to be a key policy issue in the years ahead. An ageing society is leading to an increasing number of older people and longevity to longer lives and changes in the life course. Both forces are leading to increased labour market participation at older ages. As retirement age extends in response to increases in life expectancy it is becoming less of a discrete event and more variable in its timing across a diverse age group. That implies that understanding labour supply at older ages increasingly requires a focus on the intensive margin and hours worked as well as the characteristics of a job. As tax and benefit schemes are changed to reduce incentives to retire and as health at older ages improves an issue emerges as to what makes older workers distinctive. The consequence is to either subsume older workers in more general theories of labour supply or develop a richer understanding of ageing and its impact on preferences.

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