Employment Trajectories Beyond Retirement

ABSTRACT

Within the political and academic debate on working longer, post-retirement employment is discussed as an alternative to maintain older workers in the labor market. Our article enhances this discussion by studying determinants of transitions into post-retirement jobs within differing work environments of birth cohorts 1940–1942. We estimate proportional subhazard models accounting for competing risks using unique German social security data linked to pension accounts. Our findings suggest that individuals’ preferences to take up post-retirement jobs are not mutually exclusive. Our study provides evidence that taking up post-retirement jobs is related to seeking financial security, continuity, and work ability, suggesting that public policy has to develop target-oriented support through a public policy mix of different measures aligned to the different peer groups in the labor market.

KEYWORDS:

• Post-retirement employment
• retirement transitions
• survival analysis
• working longer

Acknowledgments

We would like to thank Stefan Fuchs, Martina Huber, Marion König, Frank Micheel, Dana Müller, Anita Tisch, and Anja Wurdack for helpful comments and suggestions. We further appreciate comments received from participants of the ASA 2013, GSA 2013, ECSR 2013, CES 2014, PAA 2014, and EPC 2014 conferences. All errors are our own.

Funding

This work was in part supported by the National Science Foundation (SES-1326365).

Notes

^1. There is also the possibility that individuals are forced to switch work environments because they are not capable of working in their old job due to health limitations. However, we would consider these individuals more likely to transition to retirement only.

^2. Data version used: BASiD 5109 v1. Data access was provided by the Research Data Center of the Federal Employment Agency of Germany at the Institute for Employment Research in Nuremberg, Germany, and its on-site location at the University of Michigan in Ann Arbor, Michigan, USA.

^3. For a detailed description of all variables in the BASiD data, refer to Hochfellner, Müller, and Wurdack (2011).

^4. Note that this share is higher compared to official employment share because of the younger age span we observe in our data.

^5. If employed, the LLFS is identical to the last job prior to retirement. In case a person experiences unemployment before being retired, the LLFS differs from the last job prior to retirement.

^6. This measure includes no pension income from sources other than the public system. For the cohorts in our sample the existence of other pension income, for example, private or employer-based pension plans, is neglectable, because neither of them are major sources of income in older age of these generations (Schulze & Jochem, 2007).

^7. As a robustness check, we estimated separate models for each cohort. Tables with complete estimates can be obtained from the authors.

^8. Tables with complete estimates, in which the job seeker trajectory is the event of interest, can be obtained from the authors.

Additional information

Funding

This work was in part supported by the National Science Foundation (SES-1326365).