ABSTRACT
This chapter reviews the understanding of the link between pension provisions and labor supply. It deals with a discussion of the insights from economic theory about the possible relationships. The chapter also reviews the statistical evidence that has been developed and discusses some of the policy implications of this evidence. One is the limitations in data, statistical techniques, and behavioral theories that complicate the task of understanding the actual link between pension plan provisions and worker behavior. The assumption is that in the absence of a mandatory pension program, many people would not make adequate provision for their retirement. Provisions which make benefit receipt conditional on having earnings less than some specified amount discourage work among those approaching retirement. The objective of a mandatory pension program is to allow people to retire earlier and/or with higher retirement incomes than would otherwise be the case.
