This essay concerns the decline of employment of men aged 55–64. This phenomenon represents one of the most dramatic economic transformations of labour markets in modern industrial economies. The decline in the employment of older men is widely believed to have signaled a new phenomenon, ‘early retirement’. In an effort to understand this development, we examine past trends, disaggregate these trends to maximize international comparability, and identify the main national patterns of employment at the end of the work career and the implications of these patterns for the future of early retirement. The quantitative significance of early exit trends will grow in the future as the proportional size of the 55–64 age group relative to the rest of the working-age population increases.

A conceptual framework of early retirement

Early retirement can be understood as a social invention by firms to use the available social and public infrastructure to induce older workers to leave work in order that firms can restructure their work force. Sometimes the firm supplements the resources of the state, and sometimes it substitutes private for public resources. In this view, the firm becomes a new actor in understanding the history of the evolution of the welfare state. To our knowledge no history of the welfare state has systematically examined the interrelationship between the state and the firm from this perspective. There is, of course, considerable interest among historians in welfare capitalism.