Economic theory tells us that flexible retirement policies can have a zero or positive effect on labor force participation while the effect on hours worked can be positive or negative depending on the distribution of leisure preferences. Thus, the overall effect is ex ante unclear.
Empirical results from nine OECD countries show that the effect on labor force participation is ex post small and positive while effect on hours worked is negative. Overall, there is no evidence of the desired positive effect on total labor supply, rather, we see evidence of a dangerous decline in total labor supply. We conclude that the flexibility reforms enacted so far have failed to increase old-age labor supply and delineate several alternative options to achieve this aim.