Pension Incentives and Labor Supply: Evidence from the Introduction of Universal Old-Age Assistance in the UK

We study the labor supply implications of Old-Age Pension Act (OPA) 1908, which, for first time, provided pensions to older people in UK. Using recently released census data covering entire population, we exploit variation at newly created age-based eligibility threshold. Our results show a considerable and abrupt decline force participation 6.0 percentage points (13%) when workers reach age 70. To mitigate impact population aging today, pension reforms aimed increasing elderly supply, however, have induce much larger behavioral responses than OPA.