Social Security , Institutional Settings , and Labor Supply 1

We analyze crosscountry panel data to examine the effect of changes in the social security systems on the labor supply of men over 50 years of age. Our findings indicate that the labor supply of older men rises with the social security eligibility age, increased pension rates for later retirement, and the defined contribution replacement rate. However their participation rate falls with increases in the replacement rates in defined benefit systems and is lower if there is an early retirement option. Overall, our results imply that a switch from a defined benefit system with an early retirement option to a defined contribution system with a high age for pension eligibility (and full reward for delayed retirement) will lead to large and permanent increases in labor force participation rates of males aged 50 and older.