The purpose of this paper is to study the re-entry to the workforce of fully retired persons (unretirement) and whether the decision to resume work depends primarily on social or economic reasons.
Using Swedish register data for already retired individuals older than 55, the incidence of unretirement is studied. Determinant factors behind the decision to re-enter the labor force is analyzed in a binary response logit model.
Unretirement varies between 6 and 14 percent under two different definitions. We find support for higher pension income to decrease the probability to unretire. Other determinants, such as marital status, largely support an interpretation that unretirement is a life-style decision rather than a response to an experienced negative economic situation post retirement.
Due to data limitations, the focus in this study is on the extensive margin (the event of returning to the labor force) and not on hours of work post re-entry.
If older persons that are physically able to work also want to work and succeed in finding work when they demand so, unretirement is welfare enhancing. However, if unretirement is an effect of unexpected realizations post retirement, any increase in the number of persons facing such unexpected shocks implies an increase in the uncertainty of life as retired.
Research on unretirement is scarce and has previously been performed exclusively on US survey data. Knowing the determinants of unretirement is important to know if and how incentives to unretire should be designed.
The author would like to thank Lena Nekby, Henry Ohlsson, and two anonymous referees for valuable comments. The author would also like to thank seminar participants at the PET10-meeting, Istanbul, and at SITE, Stockholm.
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