The combination of increasing life-expectancy and earlier retirement has profoundly altered the allocation of time between work and leisure of elderly people in all OECD countries. In the early 1960s men spent on average two-thirds of their life at work - a proportion which had fallen to less than half by the mid-1990s. The incr eased leisure that older individuals enjoy has costs in terms of high budgetary outlays for govt. and lower pr oductive capacity for the economy as a whole. Yet, perversely, in almost all OECD countries, pensions and othe r benefits discourage older people from working, imposing an implicit tax on continued work that has increased markedly since the 1960s, and playing a substantial role in driving down the average retirement age.