The high unemployment rates in the United States have prompted the government and other stakeholders to take up different measures to end the problem. One of the suggested solutions is the reduction or setting of the retirement age, which entails compelling older employees to leave their work even if they would wish to remain. This paper explains my disagreement that the reduction of the retirement age can be of benefit in bringing down the unemployment rates in the country.
According to research by David and Robert (2001), the reduction of the employment opportunities or stopping them from working does not out rightly translate to more opportunities for the youth. Also, the increment of employment of the order persons cannot reduce the employment chance and neither does it lead to increased youth unemployment. The third fact is that when the retirement age is lowered, it only brings down the incentives in the additional skills thus leading to lower economic growth rates. As stated by Kopecky (2011), one thing that should be clear is that young workers cannot be the substitute for older workers because according to the economic theory, a substitution of an employee to another, has to have some skill similarity in their possession. With tis in mind then it will be very difficult to find a young person with the same skills as, for example, accompany CEO with a long service record.

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On the contrary, having late retirement would actually increase the employment of the youth. Beheim suggests that empirical evidence indicates that workers in the different ages sets are better together as they become compliments and not substitutes. The rates of employment in both cases, for the young and old, fall and rise at the same time in many countries studied (2014). There is also the impact of increased contributions of pension. This means that early retirement s responsible for the distorting of the returns from the accumulation of human capital, leading to lower economic growth. Without high growth of the economy, the rate of employment decreases, and it is likely to create a big tax burden for the future workers.

  • Beheim R. (2014). The effect of early retirement schemes on youth employment. Retreived from.
  • David T. B and Robert L. C, (2001). Mandatory Retirement and Labor-Force Participation of Respondents in the Retirement History Study. Retereived from.
  • Kopecky, K. A. (2011). THE TREND IN RETIREMENT. International Economic Review, 52(2), 287-316. Retrieved July 22, 2016, from