Trends in Labor Force Participation: How Much is Due to Changes in Pensions?

In the United States, beginning in the late 1980s there was a substantial increase in the labor force participation of men
and women in their 60s. Over the same time period the type of pension plans offered by employers shifted strongly from defined
benefit plans to defined contribution plans. Defined benefit plans typically have optimal retirement ages embedded in their
structure which induce early retirement, whereas defined contribution plans do not favor any particular retirement age. Based
on panel data, this paper quantifies the increase in participation due to the change in pension structure. The main result
is that the pension changes account for a considerable part of the increase, but other factors also made a contribution.