Is Mandatory Retirement Overrated? Evidence from the 1970s

In this paper we argue that mandatory retirement is only one aspect of a much broader system that influences an individual's retirement decision. We look at responses over time to variations in mandatory retirement rules faced by a sample of private-sector workers aged 62-64 in 1973. This is done within a model that specifically includes the economic incentives present in Social Security and pension systems. We find that the impact of a mandatory retirement rule on work is considerably smaller than a simple comparison of those with and without mandatory retirement would imply.