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We study the effect of an increase in the UK state pension age from 65 to 66, a high level internationally, on labour market activity. Despite there being limited financial incentives to retire at the state pension age, we find large effects: the employment rate of 65-year-olds increased by 7.4 percentage points for men and 8.5 percentage points for women due to the reform. The employment response is driven disproportionately by full-time workers and self-employed men, and is larger for those with lower levels of education and those living in the most deprived areas of the country.
Authors
Deputy Director
Carl, a Deputy Director, is an editor of the IFS Green Budget, is expert on the UK pension system and sits on the Social Security Advisory Committee.
Associate Director
Jonathan is an Associate Director and Head of Retirement, Savings and Ageing sector, focusing on pensions, savings and later-life economic activity.
Research Economist
Laurence is in the Retirement, Savings and Ageing sector. His work focuses on people’s savings decisions and on economic activity in later life.
Working Paper details
- DOI
- 10.1920/wp.ifs.2022.0722
- Publisher
- Institute for Fiscal Studies
Suggested citation
J, Cribb and C, Emmerson and L, O'Brien. (2022). The effect of increasing the state pension age to 66 on labour market activity. 07/22. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/effect-increasing-state-pension-age-66-labour-market-activity (accessed: 19 May 2024).
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