The causal effect of workload on labour supply of older employees

Abstract

Several policies are implemented to keep older workers in the labour force, but little is known about their effects. We investigate the effects of a particular program: at the age of 55, Norwegian teachers’ workload is reduced while wages remain the same. The program is well suited for a difference-indifference analysis, where the control group is teachers who are slightly too young to be eligible for the workload reduction. Using full population register data for the years 2005-2013, we analyze the effects on sickness absence, contracted hours, mental health and musculoskeletal problems. We find that the program reduces sickness absence and mental health problems for men, but not for women, and there is no effect on contracted hours. The results are robust to a number of checks.