Retirement Behavior Research Articles

Robust multi-outcome regression with correlated covariate blocks using fused LAD-lasso

Lasso is a popular and efficient approach to simultaneous estimation and variable selection in high-dimensional regression models. In this paper, a robust fused LAD-lasso method for multiple outcomes is presented that addresses the challenges of non-normal outcome distributions and outlying observations. Measured covariate data from space or time, or spectral bands or genomic positions often have natural correlation structure arising from measuring distance between the covariates. The proposed multi-outcome approach includes handling of such covariate blocks by a group fusion penalty, which encourages similarity between neighboring regression coefficient vectors by penalizing their differences, for example, in sequential data situation. Properties of the proposed approach are illustrated by extensive simulations using BIC-type criteria for model selection. The method is also applied to a real-life skewed data on retirement behavior with longitudinal heteroscedastic explanatory variables.

Social security and retirement around the world: lessons from a long-term collaboration

Abstract Declining labor force participation of older men throughout the 20th century and recent increases in participation have generated substantial interest in understanding the effect of public pensions on retirement. The National Bureau of Economic Research's International Social Security (ISS) Project, a long-term collaboration among researchers in a dozen developed countries, has explored this and related questions. The project employs a harmonized approach to conduct within-country analyses that are combined for meaningful cross-country comparisons. The key lesson is that the choices of policy makers affect the incentive to work at older ages and these incentives have important effects on retirement behavior.

Joining late, leaving early? Immigrant-native disparities in labor market exit

The retirement behavior of immigrants has received limited attention, despite many countries seeing rising immigrant shares in their aging populations. Population-wide data for Sweden reveals that the retirement hazard rate is higher among immigrants as early as age 50. Approaching age 65, marginal migrant groups are instead more likely to remain in the labor force rather than conform to retirement age norms. While education and family circumstances explain little of these retirement gaps, labor market history, health, and occupation are important determinants. Immigrant-native differences are more pronounced among men than women. Findings suggest that economic necessity or opportunity, rather than varying preferences, are the driving factors behind the observed retirement disparities.

Grand-parenthood and retirement

This paper uses Swedish administrative data to examine the impact of grandparenthood on retirement behaviour. For causal identification, I exploit conditionally random variation in the births of first grandchildren using an event study design. The results show a significant increase in the retirement probability for grandmothers and grandfathers when the first grandchild is born, with no significant differences between them. The effects of the arrival of the grandchild on retirement increase over time after the grandchild is born. The incremental effects are larger among grandparents in the upper half of the earnings distribution than among their counterparts. The findings suggest that grandparenthood makes grandfathers and grandmothers less elastic to financial incentives and other regulations that also promote longer working lives in a country with generous family policies, such as Sweden.

How Sticky Is Retirement Behavior in the United States?

Abstract We study how increases in the U.S. Social Security full retirement age (FRA) affect benefit-claiming behavior and retirement behavior separately. Using long panels of Social Security administrative data, we implement complementary research designs of a traditional cohort analysis and a regression-discontinuity design. We find that while claiming ages strongly and immediately shift in response to increases in the FRA, retirement ages exhibit persistent “stickiness” at the old FRA of 65. We use several strategies to explore the likely mechanisms behind the stickiness in retirement, and we find suggestive evidence that employers play a role in workers’ responses to the FRA.

The Road to Retirement: A Life Course Perspective on Labor Market Trajectories and Retirement Behaviors

Abstract While a prolonged working life has been mainly feasible for people with the most advantageous working careers, knowledge about the barriers for those with vulnerable occupational paths is still scarce. This study explores the conditions for prolonged working life from a perspective on labor market trajectories. Drawing from a gendered life course perspective and that (dis)advantageous tends to accumulate over time, we investigate the opportunity structure for the most disadvantaged workers and which characteristics of labor market trajectories can explain the decision to work longer. To this end, a Swedish longitudinal survey and register data from the Panel Survey of Ageing and the Elderly (PSAE) were used, following people across a substantial part of their working life. With sequence analysis, we identified 5 trajectories that represent typical labor market trajectories from mid-life until retirement age. Our findings showed that labor market precarity in mid-life remained a key characteristic until the expected retirement age, showing both early signs of early labor market exit and a precarity trap into a prolonged working life. These findings emphasize the need to identify at-risk groups early in their careers and that mid-life interventions are needed to prevent involuntary labor market exits and to ensure a sustainable working life. In particular, the need to protect older workers with turbulent or precarious labor market trajectories against labor market risks and retirement schemes that could inadvertently contribute to increased social and economic inequality in later life.

Joint life care annuities to help retired couples to finance the cost of long-term care

This paper examines the possibility of including cash-for-care benefits in life care annuities (LCAs) to help retired couples to cope with the cost of long-term care (LTC). The paper develops an actuarial model to assess how much it would cost to add an extra stream of payments to annuities for couples should either or both require LTC. We also analyse how willing couples would be to choose this type of LCA. Using Australian LTC transition probability data for a realistic calibration and assuming independence of the risks involved, we numerically illustrate the model and the theoretical findings implied. The paper highlights the importance of reporting the joint life expectancy and the survivor life expectancy broken down by health state, given that this information makes the computation of the actuarial factors transparent and provides highly useful information to help the couple understand the need to be protected against the cost of LTC services. Our proposal could be welfare-improving, especially for “dual-earner” couples, given that under the assumption that coordinated retirement behaviour exists within the couple, the availability of LCAs for couples may complete the market over and above the use of products for individuals alone.

Grandparents’ Retirement and Mother’s Employment Quality: The Mediating Role of Intergenerational Caregiving

The grandparents’ retirement behavior has important support on mother’s employment quality. This paper aims to estimate the influence of grandparents’ retirement behavior on mother’s employment quality, based on the China Family Panel Studies of 2018. The findings reveal a significant enhancement in mother’s employment quality resulting from grandparents’ retirement behavior. The mediating effect of grandparents’ intergenerational caregiving explains approximately 68.77% of this improvement. Furthermore, the positive effect of grandparents’ retirement behavior on mother’s employment quality is more pronounced in families where the grandchild is older and in better health. Notably, the involvement of paternal grandparents yields more favorable outcomes compared to maternal grandparents. Findings from this study suggest that grandparent’s retirement behavior play an important role in mother’s employment quality through the provision of childcare assistance. Moreover, these findings highlight that the effectiveness of such support varies depending on the characteristics of both grandchildren and grandparents.

Personal and Work-Oriented Characteristics Distinguishing Older Nurses' Partial or Complete Actual Retirement Behavior over Three Years.

To retain nurses and prevent worsening the nursing shortage, a key opportunity is to better understand the drivers of complete and partial retirement of older nurses. This study investigates the characteristics that distinguish older nurses' partial and complete actual retirement behavior, from those continuing to work, over a three-year period. A quantitative longitudinal design comprising 217 female Australian nurses aged 50 years or over, from two samples working at Time 1 (2012 and 2016), responding three years later (Time 2). Multinomial regression found two different patterns of drivers for each of completely retiring and partly retiring respectively. Age was the only variable distinguishing both partly and completely retired nurses from nurses who were not retired. The further variables distinguishing completely retired nurses were not being prosperous, having impaired work ability, being partnered, not stressed at work and working part-time. The only variable beyond age distinguishing partly retired nurses was having a casual contract. Offering flexible work options in terms of working hours and contracts that suit the nurse's lifestyle and supporting nurses with health impairments to continue working are options that may lessen the number of nurses completely retiring and instead either remaining at work or partly retiring.

Bounded rationality and optimal retirement age

This paper explores a lifecycle model of labor supply and endogenous retirement behavior for households whose planning window is truncated and who will reoptimize as extra information on productivity is revealed over time. This short horizon model internalizes the restriction on temporal resource allocation, and the labor supply is closely dependent on the degree of productivity changes in view. With the model, the retirement timing—the moment at which the marginal value from the expected resources drops below a threshold—evolves according to the planning window. Using a discrete time overlapping generations framework with leisure substitutability, in which the constraint on time is explicitly added, I demonstrate that the calibrated model economy reasonably replicates the salient facts regarding lifecycle labor supply and retirement behaviors without a borrowing constraint commonly found in models of leisure-consumption substitutability. Furthermore, this result is robust to sensitivity check. With the extended environment of mortality risks and bequests, this paper explicitly quantifies the relationship among retirement age, planning horizon, equilibrium bequests and other lifecycle characteristics from the calibrated general equilibrium.

Life history data from the gateway to global ageing data platform: resources for studying life courses across Europe

Research from a range of disciplines highlights the need to adopt a life course perspective that considers earlier life courses to explain outcomes in later life (e.g. later life health, cognitive ageing or retirement behaviour). This includes a more comprehensive assessment of earlier life courses over time and of how they are shaped by societal and political contexts. But quantitative data with detailed information on life courses that allow to address these questions are rare. Or, in case the data are available, the data are rather difficult to handle and appears to be underused. This contribution introduces the harmonized life history data from the gateway to global ageing data platform from two European Surveys, SHARE and ELSA, with data from 30 European countries. Besides providing some details on the collection of life history data in the two surveys, we also describe the way how raw data were rearranged in a user-friendly state sequence format and additionally give some examples based on the resulting data. This illustrates the potential of collected life history data from SHARE and ELSA, clearly going beyond the description of single aspects of the life course. By providing harmonized data of two prominent studies on ageing in Europe in a user-friendly format, the gateway to global ageing data platform provides a unique data source that is easily accessible for research, and permits to study life course and their links to later life in a cross-national perspective.

PRE-RETIREMENT PLANNING OF EXPATRIATE INSTRUCTORS: APPLICATION OF THEORY OF PLANNED BEHAVIOR TO THE CASE OF THE SULTANATE OF OMAN

With aging population of many countries, problems related to retirement become more and more important. At the same time, globalization resulted in emergence of new cultural groups that didn’t exist just several decades ago. Focus of the present study was to determine predictors of pre-retirement behavior of expatriate instructors. This was done through application of the Theory of Planned Behavior. The study was based on a sample of 76 academicians employed in the Sultanate of Oman. The proposed model demonstrated good explanatory ability. Attitude and perceived behavioral control constructs proved to be good predictors of retirement behavior, while the impact of subjective norms was not confirmed. Further research can be conducted in different geographical locations and different occupational groups.

Financial Planning for Retirement: The Moderating Role of Government Policy

The objective of this study is to examine the role of financial self-efficacy (FSE), retirement goal clarity (RGC), and government policy (GP) on financial planning for the retirement (FPR) behavior of public university employees based on the CWO model for retirement. Also, to examine the moderating role of GP on the relationship between FSE, RGC, and FPR. Primary data was gathered during the COVID-19 pandemic from mid-July 2020 until the end of January 2021 using a non-probability convenience sampling approach involving 525 respondents. The data were analyzed using the Structural Equation Modelling (SEM) technique. The Confirmatory Tetrad Analysis method (CTA-PLS) is used to determine the formative/reflective type of study variables. The results directly show the significant impact of the FSE, RGC, and GP on FPR. Indirectly, for those with a clear retirement goal, the perceived GP moderates its relationship with FPR. Previous research has examined FSE and RGC in FPR without considering the effect of GP.

The effect of retirement on obesity in women: Evidence from China

IntroductionRetirement has been shown to impact individual health as an important life course, and we examined the impact of retirement on the prevalence of obesity in women based on a female perspective. MethodsWe use data from the five waves of the China Family Panel Study (CFPS) data from 2010 to 2018, with the body mass index (BMI) as the obesity measure. Fuzzy regression discontinuity design (FRDD) is used to overcome the endogeneity of retirement behavior and obesity. ResultsAfter retirement, the obesity rate among women increased 23.8%–27.4% (p < 0.05). The mechanism is that the activity consumption has not changed significantly, but the energy intake has increased significantly. In addition, we found that the effect of retirement on female obesity was strong heterogeneity. ConclusionsThe study found that retirement will increase the probability of obesity in women.

Pension Reform, Incentives to Retire and Retirement Behavior: Empirical Evidence from Swedish Micro-Data

Pension Reform, Incentives to Retire and Retirement Behavior: Empirical Evidence from Swedish Micro-Data

The Impact of Household Wealth and Other Factors on Retirement Saving Behaviour in an Ageing Society: The Case of Lithuania

Abstract The main aim of the paper is to analyse the impact of household wealth (real estate, financial and other assets), income, age, education and gender on the saving for retirement behaviour of Lithuanian households. The wealth of households is one of the possible guarantees to ensure welfare in old age or another “force majeure” situation. Both non-financial and financial assets can be the saving instruments or factors influencing saving behaviour. The paper presents how much and what kind of assets Lithuanian households have accumulated and what level of income and financial ability to save they have. The research is based on the data from the Household Finance and Consumption Survey (HFCS). Data analysis reveals income and education is the most influential factors of retirement saving behaviour, households’ wealth has a positive and negative impact on retirement saving behaviour.

"The Great Retirement Boom": The Pandemic-Era Surge in Retirements and Implications for Future Labor Force Participation

As of October 2022, the retired share of the U.S. population was nearly 1½ percentage points above its pre-pandemic level (after adjusting for updated population controls to the Current Population Survey), accounting for nearly all of the shortfall in the labor force participation rate. In this paper, we analyze the pandemic-era rise in retirements using a model that accounts for pre-pandemic trends in retirement, the cyclicality of retirement, and other factors. We show that: more than half of the increase in the retired share are “excess retirements” that would likely not have occurred in the absence of the pandemic; excess retirements have been concentrated among cohorts age 65 and older at the start of the pandemic; excess retirements have been largest among the college-educated and whites; and excess retirements reflect in part that worker transitions from the labor force to retirement remain elevated. We also show that failing to account for updated population controls to the Current Population Survey leads to an underestimate of the rise in the retired share over the last few years. We use a cohort-based framework to argue that looking forward, unless the pandemic has permanently affected retirement behavior, excess retirements should eventually fade as those who retired early during the pandemic reach ages when they would have normally retired. Even as excess retirements fade, the retired share will remain well above its pre-pandemic level, reflecting population aging.

A Parsimonious Taxonomy of The Newly Retired: Spousal and Disability Combinations Shape Part or Complete Retirement.

The inadequate classification of retiree sub-groups ultimately results in misaligned policy. To generate sets of sub-groups that may be appropriately targeted for policy and interventions, variables are used that reflect the social structure of retirees, particularly the options of partial and complete retirement, marital status, gender, as well as the retirement status of the spouse, where relevant, and disability. Three sets of longitudinal Australian data were combined, each reflecting a four-year period (2003–2007, 2007–2011, 2011–2015) during which the individuals aged 45 to 69 retired (n = 1179). A multiway frequency analysis was performed to develop an inductive, combinatorial model of retirement from work. The resulting parsimonious taxonomy of sub-groups of the newly retired reflected main effects and interactions of key social-structural variables. Notably, a key driver of the pattern of results was that couples tend to coordinate their retirement behavior in both the decision to retire and form of retirement. Non-partnered retirees were more likely to be women. Disability was also a driver of retirement for non-partnered retirees, regardless of gender. Identifying sub-groups based on combinations of retiree characteristics can better inform policy design, appropriate health promotion interventions and potential specific triggers for enacting those policies. Overall, marital status, spousal retirement behavior and disability may each present a more useful basis for a taxonomy of retirement than more individually oriented age- and wealth-based systems.

Retirement behavior of cancer survivors and the role of employer-sponsored health insurance.

222 Background: Workers who rely on employment for health insurance may choose to continue working following a serious health condition, potentially harming their health in retirement. In this study, we examine the influence of retiree and employment-contingent insurance on retirement behavior and health of workers diagnosed with cancer. Methods: This longitudinal cohort study used 2000-2018 Health and Retirement Study data to examine changes in employment, weekly hours worked, and health status measures following a cancer diagnosis by health insurance status. We selected respondents who reported a new cancer diagnosis (n = 354) and a matched, non-cancer sample (n = 1,770 respondents), restricting both samples to those employed and younger than age 63. Results: Women with cancer and retiree health insurance were 21.0 percentage points less likely to work (95% CI: –38.5 to –3.5; p &lt; 0.05) relative to women with employer health insurance, but no retiree insurance. Employed women with cancer but no health insurance increased weekly hours worked by 32% relative to similar non-cancer controls. Men and women with a new cancer diagnosis and without health insurance were also less likely to work (p &lt; 0.05). Respondents with employer-based health insurance reported better subsequent health status than respondents without health insurance from their employer. Conclusions: Cancer survivors with both employer insurance and retiree health insurance are able to leave the workforce earlier, and report better health status when they stop working following a cancer diagnosis.

Joint retirement behaviour and pension reform in the Netherlands

We examine the effects of a major pension reform in 2015 on the joint retirement decisions of working couples in the Netherlands. The reform abolished the partner allowance, a state pension supplement for a nonworking partner below the state pension age. At the same time, actuarially generous early retirement arrangements were made less attractive. Using rich administrative data, we estimate a multivariate mixed proportional hazards model that distinguishes between several sources of joint retirement: financial incentives, other causal mechanisms that make retirement of one spouse more likely when the other spouse retires (e.g., due to complementarities in leisure or social norms) and correlated preferences (observed and unobserved heterogeneity). We find that, conditional on observed and unobserved characteristics, the reform reduced the tendency to retire jointly and argue that this is not only due to a change in financial incentives but also to a change in the social norm.