Early retirement across Europe. Does non-standard employment increase participation of older workers?

In many European countries, the labor market participation of older workers is considerably lower than the labor market participation of prime-age workers. This study examines the variation in labor market withdrawal of older workers across 13 European countries over the period 1995-2008. We seek to contribute to the international comparative macro literature by analyzing the effects of non-standard employment. Accounting for a number of labor market institutions, the empirical analysis leads to the conclusion that part-time employment—and in particular voluntary part-time employment—is negatively related to labor market withdrawal of older men. As such, the results indicate that part-time employment functions as ‘bridge employment’ between full-time employment and retirement. Additionally, we find that part-time employment at older ages does not decrease the average actual hours worked. Taken together, our results show that in countries with a high prevalence of part-time employment among older workers, the labor supply of older workers is higher both at the extensive and the intensive margin.