Bridge employment in the Netherlands: who, what and why?

Abstract

Extending working lives was one of the key objectives of the so-called Lisbon strategy in 2000 and still is an integral part of the European Employment Strategy. It has also been seen by successive Dutch cabinets as part of the answer to the aging of the labor market and the challenge of keeping the social welfare state affordable. The prolongation of working life after retirement is one example of how this policy objective can be realized. For society at large, the willingness of experienced older adults to work beyond retirement age provides a valuable resource. The key to capitalizing on this resource is to understand older workers’ work-retirement decisions. In this chapter, the focus is on the Netherlands. We will examine the extent to which older adults in the Netherlands continue to participate actively in the labor market after they have retired, and what factors determine this engagement in paid work after retirement.A growing number of older adults engage in some form of transitional employment between their career employment and complete labor-force withdrawal. Cahill et al. (2006), for example, found that about 60 percent of older workers in the United States moved first to some form of ‘bridge employment’ instead of directly out of the workforce. Exact definitions of bridge employment tend to vary across studies. Wang et al. (2008), for example, define bridge employment as employment (either stable or temporary) after full-time employment ends and before permanent retirement begins. We define bridge employment as working for pay, either as an employee or self-employed, and for at least one hour a week, after retirement from the main career job. There are similarities with part-time or phased retirement in that bridge employment is often part-time. The main difference is that bridge employment is generally in new jobs with a new employer or in a new occupation or industry (Cahill et al. 2006). As a rule, bridge employees in the Netherlands are eligible for any form of regular retirement income.The structure of this chapter is as follows. We will start with a section on the institutional context of retirement in the Netherlands. This is highly relevant, since this context shapes the opportunities and constraints people face in making choices regarding work and retirement. The second section deals with the process of retirement, and more particularly with the question of how common it is in the Netherlands to re-enter the labor market after retirement. To what extent does retirement mean that people actually withdraw from the labor market? The third focuses on who decides to embark on a new career after retirement. We will examine specifically whether particular socio-economic categories are overrepresented among those who do and whether this is in any way related to the nature of the retirement process. It may well be, for example, that workers who were forced to take early retirement for whatever reason are more inclined to extend their working lives than those who did so voluntarily. In the fourth section, we will address what bridge employment actually entails. Do pensioners opt for part-time jobs with a short working week that are closely related to the work they used to do, or is there little connection with their former job? Do older adults use this opportunity to give a new direction to their career? In the fifth section, we will seek to discover what drives people to continue to participate in the labor market after they retire. We will focus on the reasons post-retirement workers themselves give for continuing to work. This may indicate whether bridge employment is driven primarily by financial or extrinsic motives, or whether intrinsic factors, such as the nature of the job, play a more important role.This chapter is based on data from the NIDI Work and Retirement Panel, an ongoing longitudinal survey of older workers (50 years and over) in the Netherlands and their partners that started in 2001. Respondents were followed over a period of ten years and were questioned in 2001, 2006 and 2011 (see Appendix 2.1 for more information on the data). The longitudinal character of this study provides the opportunity to follow older workers in the transition to retirement and study participation in bridge employment after leaving the career job.