Workers Live Longer; Why Don't They Work Longer?

This post, and the next few, come from the excellent Shreyer Seminar on Marriage, Family, and the Social Sciences.

Some economists think that, since people live longer, they should work longer: work brings money and that is what matters most. In most countries the retirement age was set long ago, at what was then the average life expectancy. Today, most people who are working at middle age will be healthy long past that threshold. They could work and make more money. This would bring a personal benefit to them, and would help fend off the financial crisis of the retirement systems of all developed countries as the Baby Boom starts to exit the workforce.

Alicia Adsera, a Princeton economist, reviewed the actual retirement patterns of all the European countries. In almost none did the average person - male or female - retire at the official retirement age. In a couple of Baltic states they worked past the age when retirement benefits began. But in all the other countries, most people retired well before the official retirement age. Making more money was not enough to keep them working.

This makes sense to me. In societies with secure pension systems (which includes just about all developed societies), most people do not need to keep working in old age just to survive. So what do they work for? Primarily, for their families. And when most people get to the point where their children are grown and launched, the main motivation to keep working full time grows up and moves out, too.

The chance for old people to make more money will not solve the pension problem, because money-making is not the main thing that motivates most people. Family is.