In an Institute of Economic Affairs discussion paper, John S. Heywood and W. Stanley Siebert examine the labour market for older workers and ask why retirement is so abrupt and what can we do about it. They focus on the United Kingdom's employment equality (age) regulations and whether they are likely to help the functioning of the market for older workers.
In "Understanding the Labour Market for Older Workers", the authors determined that the abuptness of retirement is due, historically, to the fact that in most countries it has been difficult to work and receive a pension. Pension rules discourage on-going relationships with existing employers, despite the fact that those employers have already paid the fixed costs associated with hiring and training and it was to those firms that the workers are most valuable. The find, however, that the situation has changed for the better, at least in the UK.
Source: Institute of Economic Affairs Discussion Paper No. 23 Abstract (November 30, 2008)