The labour supply effect of the abolition of the earnings rule for older workers in the United Kingdom

  • Disney R
  • Smith S
  • 17


    Mendeley users who have this article in their library.
  • 46


    Citations of this article.


High effective tax rates on work at and around state pension age deter participation. An example is the "earnings test" operating in several OECD countries. The United States abolished its test for the 65+ age group in 2000. The United Kingdom offers a "natural experiment" of this reform, as it abolished its test, known as the "earnings rule", in 1989. We examine the effect of this change, taking account of the opportunity to defer pension rights. Abolition of the rule raised working hours of older male workers by around 4 hours a week, with a lesser impact on women's behaviour.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document


  • Richard Disney

  • Sarah Smith

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free