Note: This is post #104 in a weekly video series on basic economics.

An important factor influencing an individual’s decision whether to keep working as they get older is their government’s tax and retirement policies. Taxes on earnings plus penalties, like losing retirement benefits, gives us an implicit tax rate, explains economist Alex Tabarrok. Countries with higher implicit tax rates for older workers see a much lower labor force participation rate for people considered retirement age.

(If you find the pace of the videos too slow, I’d mend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)