Comment

In recent years, various Organisation for Economic Co-operation andDevelopment (OECD) countries have implemented reforms targeting work incentives directed at older workers. So understanding how such reforms affect the labor market is crucial. I see this interesting and important paper by Richard Rogerson and JohannaWalleniusas as a first step in an exciting new research agenda. In this paper, the authors investigate the link between the labor market policy reforms targeting older workers and these workers’ employment rates. The paper presents an extremely useful synthesis that brings together findings from different countries, and it suggests an important avenue for further research. The paper contains numerous insights, and below I discuss the main argument. First, the authors document that the employment rate of men aged 55–64 has displayed aU-shaped pattern over the last 4 decades. Interestingly (and somewhat surprisingly), this pattern is common across many advanced economies, hinting that a common explanation could be responsible for it. At the same time, the reversal’s magnitude varies across countries. The explanation the authors put forth is based on three steps. First, the authors argue for the importance of “institutions” that gave rise to provisions that favored a reduction in employment rate of this older age group inmany countries in the 1970s and 1980s. Second, they suggest there was a mean-reverting aggregate shock that led to a recovery in the employment