Abstract
BackgroundWork life expectancy (WLE) expresses the expected time a person will remain in the labor market until he or she retires. This paper compares a life table approach to estimating WLE to an approach based on multi-state proportional hazards models. The two methods are used to estimate WLE in Danish members and non-members of an early retirement pensioning (ERP) scheme according to levels of health.MethodsIn 2008, data on self-rated health (SRH) was collected from 5212 employees 55–65 years of age. Data on previous and subsequent long-term sickness absence, unemployment, returning to work, and disability pension was collected from national registers. WLE was estimated from multi-state life tables and through multi-state models.ResultsResults from the multi-state model approach agreed with the life table approach but provided narrower confidence intervals for small groups. The shortest WLE was seen for employees with poor SRH and ERP membership while the longest WLE was seen for those with good SRH and no ERP membership. Employees aged 55–56 years with poor SRH but no ERP membership had shorter WLE than employees with good SRH and ERP membership. Relative WLE reversed for the two groups after age 57.At age 55, employees with poor SRH could be expected to spend approximately 12 months on long-term sick leave and 9–10 months unemployed before they retired – regardless of ERP membership. ERP members with poor SRH could be expected to spend 4.6 years working, while non-members could be expected to spend 7.1 years working.ConclusionWLE estimated through multi-state models provided an effective way to summarize complex data on labor market affiliation. WLE differed noticeably between members and non-members of the ERP scheme. It has been hypothesized that while ERP membership would prompt some employees to retire earlier than they would have done otherwise, this effect would be partly offset by reduced time spent on long-term sick leave or unemployment. Our data showed no indication of such an effect, but this could be due to residual confounding and self-selection of people with poor health into the ERP scheme.
Highlights
Work life expectancy (WLE) expresses the expected time a person will remain in the labor market until he or she retires
We conduct the method comparison though an example where we study the effect on WLE of poor health and the financial possibilities for early retirement
The multi-state life table (MSLT) method has shown to be a good approximation for WLE estimations [8], compared to prior methods which relied on yearly statistics of labor market affiliations and death rates [7]
Summary
Work life expectancy (WLE) expresses the expected time a person will remain in the labor market until he or she retires. In European countries, the relative high income taxes finance the social welfare and secure social benefits for the citizens if they become sick-listed, unemployed, or if they retire early [1]. The aging workforce in most high income countries poses a threat to labor market participation and severely challenges the social welfare systems. The duration of high level unemployment benefits was reduced from four to 2 years in October 2010 (www.retsinformation.dk). 2. Increasing the official retirement age from 65 to 67 for people born after 30 June 1960, and planning to increase it further if the average life expectancy increases (www.retsinformation.dk)
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