How do retirement tests affect the labour supply of older men?

We analyze the sequential elimination of retirement/earnings tests from Canada's public pension plans. Our empirical framework potentially overcomes the obstacles encountered analyzing the tests within the context of a national social security system. Our results indicate that the removal of th...

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Bibliographic Details
Published in:Journal of public economics 1999, Vol.71 (1), p.27-51
Main Authors: Baker, Michael, Benjamin, Dwayne
Format: Article
Language:English
Subjects:
Canada
Cost analysis
Earnings tests
Empirical research
Fixed costs
Labor economics
Labor supply
Labour supply
Men
Pension funds
Pension plans
Public economics
Public pensions
Retirees
Retirement
Social security
Studies
Testing
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Summary:We analyze the sequential elimination of retirement/earnings tests from Canada's public pension plans. Our empirical framework potentially overcomes the obstacles encountered analyzing the tests within the context of a national social security system. Our results indicate that the removal of the tests were associated with relatively large shifts from part year full time to full year full time work. We are unable to reconcile these results within the context of a traditional labour supply model. Instead, they are consistent with a model which incorporates fixed costs of work, or labour market rigidities which preclude continuous reductions in labour supply around retirement.
ISSN:0047-2727
1879-2316
DOI:10.1016/S0047-2727(98)00056-5