As the population in developed countries ages and the demands on the social-security system increase, the labour supply and retirement choices of older workers has gained central stage in the policy and economic debate. Older workers face specific demands on their time and specific risks that need to be taken into account if the design of retirement policies and insurance schemes for this group are to have some element of optimality. In particular, this is a stage of life when individuals become more vulnerable to changes in health and cognition that may limit their productivity and work capacity; they may also face increasing demands on their time, for instance if caring for a ill spouse or for a grand-child.
Our research in this area aims to explain patterns of labour force participation among older people and how these have changed over time, looking at how people respond to financial incentives from the tax, benefit and pension systems, and how these responses interact with factors such as family circumstances and health and cognition shocks. IFS is a partner in the English Longitudinal Study of Ageing (ELSA), an interdisciplinary data resource on health, economic position and quality of life as people age that supports much of our research on older workers.