Early Retirement: The Problems of “Instrument Substitution” and “Cost Shifting” and Their Implications for Restructuring the Process of Retirement

Abstract

The deterioration of the labour market in all OECD countries since the oil price shock of 1973 has brought with it a massive increase in early retirement. This is a result not only of discouraged older job seekers leaving the labour market for the more socially acceptable “alternative role” of early retiree, or, of persons eligible for disability benefits finding themselves forced by lack of work to exercise that option, but also of conscious policies by governments, backed by employers and trade unions (Casey and Bruche (1983), Casey (1984a), ISSA (1985)).

A first draft of this paper was presented at the Workshop “Preparation for Retirement — Variations and Approaches in the Field of Early Retirement” at the International Week of Gerontological Events organized by the Israeli Gerontological Society in Jerusalem 24–30 August 1986. A second version was presented to the WZB and Nordic Council Joint Conference on “Social Policy and Labour Markets” held at Bergen, 30 June 1987. I should like to thank Xavier Gaullier, Steve Nesbitt and participants at the Jerusalem workshop for their comments on the first draft, participants at the Bergen and Berlin conferences for their comments on the second and third drafts and Martin Rein for the initial discussion we had on the issues this paper covers.