Facilitating Longer Working Lives: International Evidence on Why and How

The article advances the view that social and economic choices in societies can reasonably adjust as the age structure of the population changes; in particular, some of the bounty of longer lives can reasonably be allocated to prolonging the labor force participation of older workers. Data on reductions in mortality and, in some countries, declines in disability are presented in ways that help to clarify that prolonged working lives may be a natural concomitant of living longer. The article reviews the problems inherent in the combination of living longer and reducing labor force participation at older ages. It discusses two ways to facilitate longer working lives: (1) eliminating penalties on work at older ages—inherent in the provisions of the social security programs in many countries—that induce older persons to leave the labor force at younger ages; and (2) correcting a false tionale—the "boxed economy" view of the labor market—that is often used to support retention of the provisions that induce older persons to leave the labor force.