Which of the following are two common reasons why workers who have reached retirement age might continue to work?

• A. To decrease labor productivity and to lower wage rates
• B. To avoid paying taxes and to receive government subsidies
• C. To supplement insufficient retirement income and to stay mentally active
• D. To increase market competition and to reduce unemployment

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the context of the question, which asks for common reasons why workers who have reached retirement age might continue to work. This relates to labor supply decisions in microeconomics, particularly for older workers.
2. Step 2: Analyze each option by considering economic incentives and motivations for retirees to keep working. For example, think about financial needs and non-monetary benefits such as mental engagement.
3. Step 3: Recognize that decreasing labor productivity or lowering wage rates are generally not motivations for retirees to work; these are outcomes related to labor market conditions, not personal reasons.
4. Step 4: Consider that avoiding taxes or receiving government subsidies is unlikely to be a primary reason for continued work, as retirees often face different tax treatments and subsidy eligibility.
5. Step 5: Identify that supplementing insufficient retirement income (a financial reason) and staying mentally active (a non-financial reason) are well-documented motivations for retirees to continue working, making this the correct choice.