Old-age Retirement Research Articles

Trajectories of antidepressant medication before and after retirement: the contribution of socio-demographic factors

The association between retirement and mental health is assumed to depend on socio-demographic factors, but there is a lack of empirical evidence. We examined antidepressant medication before and after retirement by age, gender, living arrangements, and social class. The material comprised nationally representative register data from Finland. Linear regression analysis was used to calculate changes in antidepressant medication 7.5years before and after disability (N=42,937) and old-age (N=19,877) retirement in 1997-2007 by socio-demographic factors. No changes in antidepressant medication (mean DDD/3-month period) were observed around old-age retirement regardless of the socio-demographic factors. After a slight initial increase in antidepressant medication there was a substantial rise 1.5-0years before disability retirement, after which there was a marked decrease, particularly during the first 3years. These effects were less pronounced in retirement due to somatic causes. Age was the strongest modifying factor in retirement due to both depression and somatic causes, with a stronger increase and limited decrease in antidepressant medication among the younger age groups. The post-retirement decrease was also somewhat stronger among men, and among those in higher social classes and those living with a spouse in depression-related retirement. In somatic causes, the pre-retirement increase was stronger among those in higher social classes. Prevention and rehabilitation of mental-health problems in association with work disability should focus particularly on young adults, among whom the strong increase in antidepressant medication before disability retirement, and the continued high levels of medication after the transition signify long periods of morbidity and premature retirement.

Retirement decisions in transition: microeconometric evidence from Slovenia

In this article we analyse old-age retirement decisions of Slovenian men and women eligible to retire in the period 1997–2003. In comparison with established market economies we find relatively high probabilities of retirement that decline with age. This unusual pattern can partly be attributed to weak incentives to work, inherent in the design of the pension system and reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We find that the probability of retirement decreases with option value of work and net wages, although the response to the former, when controlling for the latter, is rather weak. Our results also imply that less educated individuals and individuals with greater personal wealth are more likely to retire.

Changes in Labor Force Participation of Older Americans and Their Pension Structures: A Policy Perspective

We investigate how the shift in private pension coverage from defined benefit (DB) to defined contribution (DC) retirement plans since the 1980s has contributed to the substantial rise in labor force participation of older Americans. We develop a life cycle model of retirement that captures important aspects of private (DB and DC) and public (Social Security Old-Age) pensions. We demonstrate how this novel framework can assist policy makers and researchers in analyzing the complex interrelations of labor supply decisions, retirement behavior, and wealth accumulation. We begin by illustrating important differences in the incentives for labor supply and retirement behavior provided by DB and DC pensions. We show that the timing of the exit from the labor force is closely tied to wealth accrual in DB plans, while wealth accrual in DC plans does not provide similar incentives for the timing of retirement. We then use the model to conduct a cohort-based simulation analysis of labor force participation for the period 1977 to 2010. The results illustrate the potential significance of the rise in employer-sponsored DC pensions in explaining the increase in labor force participation of older Americans. We estimate that, holding the share of individuals with employer-sponsored pensions constant, the shift from DB to DC pension coverage increased the labor force participation rate of workers age 60 to 64 by 4.9 percentage points (1.7 points for ages 65-69). Finally, we show that DC pension holders are more concentrated at the earliest take-up age for Social Security old-age retirement benefits and are less responsive to changes in Social Security retirement age policy than DB pension holders.

Is retirement beneficial or harmful to mental health?

Is retirement beneficial or harmful to mental health?

Trajectories of mental health before and after old-age and disability retirement: a register-based study on purchases of psychotropic drugs

Retirement from paid work is a major life event facing increasingly large numbers of people in the coming years. We examined trajectories of mental health five years before and five years after old-age and disability retirement using data on purchases of psychotropic drugs. The study included all employees from the City of Helsinki, Finland, retiring between 2000-2008 due to old age (N=4456) or disability (N=2549). Purchases of psychotropic drugs were analyzed in 20 3-month intervals before and after retirement using graphical methods and growth curve models. Old-age retirement was unrelated to purchases of psychotropic drugs. Among disability retirees, psychotropic medication tripled before retirement. The average increase was 0.95 [95% confidence interval (95% CI) 0.73-1.16] daily defined doses (DDD) 5-1.5 years before retirement; from 1.5 years until retirement it was 5.68 DDD (95% CI 5.33-6.03) for each 3-month interval. After disability retirement, purchases of antidepressants decreased on average by 0.40 DDD (95% CI 0.57-0.23) for each 3-month interval, those of hypnotics and sedatives increased by 0.30 DDD (95% CI 0.12-0.47), and no changes were seen for other psychotropic drugs. The changes before and after retirement were largest among those who retired due to mental disorders and those whose retirement had been granted as temporary. While no overall decrease in psychotropic medication after retirement was observed, purchases of antidepressants decreased after disability retirement. Long-term trajectories suggest that disability retirement might be prevented if mental health problems were tackled more efficiently earlier in the pre-retirement period.

Will the Dismantlement of Early Retirement Schemes Increase Older Unemployment? A Competing-risk Analysis for Belgium

On the basis of administrative data for Belgium, we estimate a competing-risk model on transitions from employees aged 50 and older into unemployment, early and old-age retirement while accounting for forward-looking work disincentives. Our estimates are used to simulate a cut in early retirement benefits. Although this would enhance the financial sustainability of the social security system, our simulations predict a strong increase in unemployment among older blue-collar workers in traditional industries. Members of private saving plans or occupational pension schemes and highly educated workers are predicted to move into the old-age pension system.

Vices and Virtues of Old-age Retirement

Vices and Virtues of Old-age Retirement

Optimal savings and health spending over the life cycle

This paper investigates the relationship between saving and health spending in a two-period overlapping generations economy. Individuals work in the first period of life and live in retirement in old age. Health spending is an activity that increases quality of life and longevity. Empirical evidence shows that both health spending and saving behave as luxury goods but their behaviour differs markedly according to the level of per capita GDP. The share of saving on GDP has a concave shape with respect to per capita GDP, whereas the share of health spending on GDP increases more than proportionally with respect to per capita GDP. The ratio of saving to spending is nonlinear with respect to income, i.e. first increasing and then decreasing. This ratio, in the proposed model, is equal to the ratio between the elasticity of the utility function with respect to saving and the elasticity of the utility function with respect to health.

IS LEISURE CONTAGIOUS? THE RELATIONSHIP BETWEEN SICKNESS ABSENCE AND SPOUSAL RETIREMENT

This paper studies the relationship between sickness absence and spousal retirement. Swedish panel data have been used to estimate the effects of both old-age retirement and disability retirement on average sickness absence during 1996 to 2001 for men and women. Spousal old-age retirement significantly increases female average long-term sickness absence by approximately one week per year, while spousal disability retirement yields a significant increase in average sickness absence for men by approximately one week and for women by approximately two weeks per year.

Emergence of the notion of retirement in rural China:

Since the outset of the reform process in 1978, rural China has been undergoing fundamental changes in the relationships between the state, society and individuals. Social policy, including pension policy for rural residents, is an essential factor in this transformation process which has influenced the life chances of many peasants. This paper deals with the relationship between social policy and individual life courses in the case of Shanghai's rural pension policy. It integrates the theoretical insights from life course research to emphasise the close relationship between the state welfare and the institutionalisation of the life course. By analysing biographical interviews conducted in rural Shanghai, this article has identified the changing nature of welfare mix in rural old-age security as well as the emergence of the notion of retirement among the peasants in rural Shanghai. The introduction of the innovative rural pension policy has given rise to the rudimentary emergence of a modern life course, in the contour of a temporal partition between work and retirement. However, diverse local subsidies and individual household situations have led to different perceptions and biographical orientations of the peasants with respect to their old-age security and retirement.

Zu alt für den Arbeitsmarkt. Arbeitslosenrenten als Rationalisierungsmaßnahme in Finnland in den 1980er Jahren in einer historischen Perspektive

This article argues that welfare schemes, which served to remove elderly workers from the labour force around the 1970s, foreshadowed the breakdown of the world of work in which permanent employment contracts and secure jobs until old-age retirement were the norm. As the global economy put heavier pressure on profitability and all sectors became subject to international shareholder scanning, the policy of ‘lifelong jobs’ began to give way to flexible labour throughout Europe. This change is discussed here using the empirical case of the Finnish unemployment pension schemes providing for the elderly labour force. The article asks how Finnish employers made use of unemployment pensions in the 1970s and 1980s in order to get rid of older employees. A large Finnish corporation, in particular its female labour force, are discussed in detail. Based on the working careers of about 100 women (manual workers and salaried employees) this article examines who kept their jobs and who were dismissed and pensioned off on unemployment pensions. The examples of women who succeeded in keeping their jobs at the time of mass-dismissals imply that careers (internal labour market) and occupational sociability (social capital) may be equally as valuable for women as they are for men.

Zu alt für den Arbeitsmarkt. Arbeitslosenrenten als Rationalisierungsmaßnahme in Finnland in den 1980er Jahren in einer historischen Perspektive

Abstract This article argues that welfare schemes, which served to remove elderly workers from the labour force around the 1970s, foreshadowed the breakdown of the world of work in which permanent employment contracts and secure jobs until old-age retirement were the norm. As the global economy put heavier pressure on profitability and all sectors became subject to international shareholder scanning, the policy of ‘lifelong jobs’ began to give way to flexible labour throughout Europe. This change is discussed here using the empirical case of the Finnish unemployment pension schemes providing for the elderly labour force. The article asks how Finnish employers made use of unemployment pensions in the 1970s and 1980s in order to get rid of older employees. A large Finnish corporation, in particular its female labour force, are discussed in detail. Based on the working careers of about 100 women (manual workers and salaried employees) this article examines who kept their jobs and who were dismissed and pensioned off on unemployment pensions. The examples of women who succeeded in keeping their jobs at the time of mass-dismissals imply that careers (internal labour market) and occupational sociability (social capital) may be equally as valuable for women as they are for men.

Social Security and Retirement During Transition: Microeconometric Evidence from Slovenia

In this paper we analyse old-age retirement decisions of Slovenian men and women eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This peculiar pattern can be partly attributed to weak incentives to work inherent in the design of Social Security, and is reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relativily high pensions of less productive (skilled) workers and vice versa. We also find that the probability of retirement increases with social security wealth and decreases with net wages, although the response to option value to work, when controlling for wage differences, is rather weak. Our results also imply that less educated persons, persons with greater private wealth, and persons entitled to severance payment are more likely to retire.

Old-age benefits and retirement decisions of rural elderly in Brazil

I estimate the impact of social security benefits on retirement decisions of rural workers by studying changes in the rules governing old-age benefits for rural workers in Brazil. I focus on a reform implemented in 1991, which reduced the minimum eligibility age, increased benefits, and extended the program to non-heads of households. Because those benefits come with no strings attached — they are not means or retirement tested — any behavioral response is a pure income effect. The main finding of the paper is that access to old-age benefits is a strong determinant of retirement of rural workers in Brazil: receiving old-age benefits increases the probability of not working by about thirty-eight percentage points and reduces total hours per week by 22½ h.

Gradual Retirement and Lengthening of Working Life

In order for the part-time pension to make sense economically, it should extend the length of the working career. An interesting question is also whether the timing of retirement and willingness to work after retirement are related. We use data on the aspirations of individuals regarding their old-age retirement behaviour to estimate a multivariate probit model with three binary dependent variables: partial retirement, planning to continue working beyond age 63, and planning to continue working while on retirement. The model is estimated using simulated maximum likelihood. The probability of being on parttime pension increases with the length of working career, but decreases with wage. It is positively related to an indicator of chronic illness. Age has a positive effect on the probability of thinking about continuing working after age 63, which is natural since in the older age cohorts those preferring to retire early have already done that. Higher wage and private pension insurance have a negative effect on the probability of continuing to work, while the level of education increases it. Women and those having mental strain in their job are less likely to postpone retirement. The probability of continuing work while retired is difficult to predict. Only good self-assessed health seems to play an important role in this decision-making. Being on partial retirement has no positive impact on the probability of preferring to stay longer at work. This gives support to the worries that partial retirement is a tool that helps in increasing the labour force participation of the aging labour force, but at a relatively high cost.

To Retire or Not to Retire: Is There an Option for Older Workers in Hong Kong?

Abstract Over the next thirty years, Hong Kong will have a rapidly ageing population. One possible consequence of this will be a labour shortage, which means that it will be essential to strike a proper balance between the amount of time spent in work and the amount spent in retirement in old age. The balance is determined by the interaction between the aspiration of workers, employers’ attitudes to older workers, as well as the productivity of the labour force. In this article, we examine the issue based on life‐course theory and we argue that the compartmentalization of education, work and retirement must be broken by changes in social policy. We identify three groups of future older adults in the coming three decades: those who may be forced to retire early in their fifties, those who plan to retire in their sixties, and those who will continue to work until they can no longer work. The current situations of these groups are described, and social policies that are related to retirement pension scheme, age discrimination, life‐long education, and flexible work arrangements are suggested to weaken the age structuring of education and employment institutions. Our ultimate objective is to create a societal environment in which older workers have a real option either to work or to retire in the coming decades.

Old-Age Benefits and Retirement Decisions of Rural Elderly in Brazil

I estimate the impact of social security benefits on retirement decisions of rural workers in a developing country by studying changes in the rules governing social security in Brazil. I focus on a reform occurred in 1991, which brought a reduction in the minimum eligibility age for males and females, a doubling of benefit values and the extension of benefits to non-heads of households. Because beneficiaries are not subject to means or retirement tests, I estimate a pure income effect. I find that a reduction in the minimum eligibility age for old-age benefits was important drivers of a reduction in the retirement age among rural workers in Brazil. I find that benefit take-up rates are greatest among the better educated, but that least-schooled workers show the largest labor supply responses to the reform. Last but not the least, I find that anticipated benefits do not affect the labor supply of workers close to the minimum eligibility age.

Life-Long Work or Well-Deserved Leisure in Old Age? Conceptions of Old Age Within the French and German Labour Movements in the Late Nineteenth and Early Twentieth Centuries

SummaryThe close connection between old age and retirement and to what extent society accepts work-free retirement in old age emerged as the topical themes we know in France and Germany as late as the 1950s and 1960s. By analysing the relevant discussions in the labour circles of both countries the author examines whether this modern concept of retirement originated in the early phase of the welfare state. The concepts and points of criticism which each of the labour movements developed for old age provision show, by virtue of the different national mental attitudes, that their considerations about old age as a life phase diverged from one another to a great degree. The German labour movement believed that old age pensions were primarily a compensation for the reduction in income on reaching an advanced age, and it thus gave preference to the invalidity pension. In contrast, French society supported the idea of welfare security for the old. Along with criticisms of state social policies, the purpose of providing for the old is at the centre of the essay's analysis, more specifically the contrary forms this discussion took in Germany and France: obliged to work in old age or well-earned retirement.

Physical and Mental Health Changes in Retirement Age

Effects of retirement on health were studied in a prospective follow-up study (TURVA project). The subjects were examined when they were 62 and 66 years old. At the beginning of the study more than half of the subjects were still working and the rest of them pensioned. Retirement had no clear effect on the subjects' physical health. Mental health of the subjects who retired at age of old-age retirement became better than that of the subjects who retired before the study. Diminished work stress may explain positive changes in mental health during retirement process.

Implications of population change on social insurance systems providing old-age benefits

General agreement, although not completely universal, exists in North America that cost analysis of programs providing old-age retirement benefits should be conducted over the long range, and not merely over the next few years. The actuarial cost estimates for what is now the U.S. Old-Age, Survivors, and Disability Insurance program have always been made over a long period of future years. Initially, for the 1935 Act, this period was 44 years (up through 1980), but most subsequent valuations of the program have used a 75-year period. The justification for this length of time is that it covers essentially the entire lifetime of every person in covered employment on the valuation date. It must be recognized that outside of North America — but with the exception of the United Kingdom — long-range social insurance programs providing retirement benefits are not generally considered over long future periods. The argument made in support of this short-sighted approach is that it is impossible to predict with any precision such long-range future operations. Countering this is the point that an estimate prepared by well-qualified persons is far better for policy planning and analysis than nothing at all.