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