Opinion from a Libertarian ViewPoint

Lump of Labor Fallacy Shouldn’t Guide Retirement Decisions

Posted by M. C. on February 1, 2023

As long as there are human beings out there, there will be scarcity, and, hence, plenty of job openings for people, young and old.

By Walter E. Block

It is difficult to know when to retire. Do it too early, and you might well be bored for the rest of your life, bereft of your workplace friends, not to say a bit of money. Do it too late and you miss out on the joys of a bit of well-earned relaxation. There are motives galore for going in either direction on this matter.

But there is one that is predicated upon an economic fallacy: retiring, so as to allow a younger person to take your job. All too many people in the sixties and older leave their jobs for this reason. They are, to be sure, well intended. But they are in thrall to what economists call the “lump of labor” fallacy. This is the view that there only so many jobs to be had, and if some people “hog them up” there will be just that many fewer for others to take. The thought is that if elderly workers stay on the job, younger ones will be precluded from employment; that if they leave, more youthful laborers will for the first time be able to land on the employment ladder.

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