Exiting the labour market early: retirement or discrimination?

Abstract

Several studies show that despite a decline in mortality and improvements to health conditions, workers have left the economic activities early. The literature associates precocious exit from the labour market to the widespread coverage of Social Security. One alternative to contain the fiscal imbalance in most countries has been to postpone the minimal age to be entitled to a pension benefit. Nevertheless, many studies suggest the existence of barriers that make it difficult for older workers to remain in economic activity. Among them are prejudices among employers.This paper aims to understand the non-participation of Brazilian men aged 50-64 in economic activities. The focus on this age group is because they would be the first group to be affected by the pension reform proposed by the Government. These are those who are neither in the labour market nor retired (neither-nor). The proportion of these men of the total number of men in this age group increased from 3.5% to 10.2% between 1984 and 2015. Very low schooling and worse health conditions compared to other men can contribute to difficulties for insertion. This suggests discrimination in relation to the older worker and the lack of public policies aimed at reinforcing the ability of these individuals to obtain a job.

Key words
Labour market; Social security; Neither-nor; Discrimination