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'Voluntary' and 'involuntary' early retirement: an international analysis

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  • David Dorn
  • Alfonso Sousa-Poza

Abstract

Recent literature makes a distinction between 'voluntary' and 'involuntary' early retirement, where 'involuntary' early retirement results from employment constraints rather than from a preference for leisure relative to work. This article analyses 'voluntary' and 'involuntary' early retirement based on international microdata covering 19 industrialized countries. The results show that 'involuntary' early retirement is particularly widespread in Continental Europe. Countries facing economic recessions and having strict employment protection legislation have higher shares of 'involuntary' retirements among early retirees. Generous early retirement provisions of the social security system do not only make 'voluntary' early retirement more attractive for individuals, but also induce firms to push more employees to retire early.

Suggested Citation

  • David Dorn & Alfonso Sousa-Poza, 2010. "'Voluntary' and 'involuntary' early retirement: an international analysis," Applied Economics, Taylor & Francis Journals, vol. 42(4), pages 427-438.
    • Handle: RePEc:taf:applec:v:42:y:2010:i:4:p:427-438
    DOI: 10.1080/00036840701663277
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    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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