Working Hours Flexibility and Old Workers’ Labour Supply

Abstract

This paper studies the presence of hours constraints on the UK labor market and its effect on elderly labor force participation using panel data for the period 1991-2004. We find that working hours constraints force old female workers to retire at once rather than retire gradually, while old male worker are more able to reduce the number of working hours within their current job. As a result, over-employed female workers retire about one year earlier than their unconstrained colleagues. Although, increasing working hours flexibility may prolong female working lives, net elderly female labor supply decreases when hours flexibility is enhanced.