Post-retirement employment: determinants and labor market consequences

Many studies in the literature on retirement continue to treat retirement as an absorbing state (an individual who is retired will not start working again) and consider work and retirement as mutually exclusive conditions, despite the fact that the post-retirement participation rate has strongly tended upward in the past three decades. Post-retirement employment can have important consequences for the labor market and the economy as a whole. This paper summarizes theory and empirical evidence on the determinants and consequences of post-retirement employment for the labor market. Why does a growing number of retirees continue working after retirement, what are the main characteristics of those who choose this pathway, and is post-retirement employment a desirable phenomenon? This paper discusses the literature from a labor supply perspective by focusing on the personal and economic determinants of post-retirement as well as examining the labor demand perspective. Finally, this paper reviews the growing body of literature that explores the impact of continued employment of older workers on the labor market.