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Article
Publication date: 3 June 2021

Filip Chybalski

The purpose of this paper is to examine whether cross-country differences in pensionable age explain such differences in economic activity of people at near-retirement age.

Abstract

Purpose

The purpose of this paper is to examine whether cross-country differences in pensionable age explain such differences in economic activity of people at near-retirement age.

Design/methodology/approach

The empirical study uses regression models for macro-panel encompassing 21 European countries in the period 2008–2014.

Findings

Empirical results indicate that pensionable age is a determinant of cross-country differences in employment rate in the near-retirement age group, and less a factor differentiating average effective retirement age. It turns out that other factors matter, including salaries and wages as percentage of GDP (treated as a proxy for the occupational composition of populations across the countries studied), self-employment, participation in education and training, or self-perceived health.

Social implications

The problem of economic activity at the near-retirement age is complex and cannot be limited to legal regulations concerning pensionable age. The policy aiming at stimulating the economic activity of the near-elderly should include actions on many sides including labour market, pension system, education, training, or health care.

Originality/value

The results complement studies based on the single-country approach and demonstrate that pensionable age does not account for cross-country differences in terms of average effective age of retirement when controlling for other factors. Moreover, factors differentiating effective retirement age and employments rates across countries studied are not similar.

Details

Journal of Economics, Finance and Administrative Science, vol. 26 no. 51
Type: Research Article
ISSN: 2077-1886

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Article
Publication date: 21 January 2021

Marie-Eve Dufour, Tania Saba and Felix Ballesteros Leiva

In the context of population aging, retirement has become a central issue in academic, professional and government discourse. A consensus can be seen to be emerging around…

Abstract

Purpose

In the context of population aging, retirement has become a central issue in academic, professional and government discourse. A consensus can be seen to be emerging around the idea of postponing retirement in favor of promoting active aging. From this perspective, the purpose of this study, using work-role attachment theory and met expectations theory, is to focus on the pre-retirement period and aims to better understand how certain individual factors and expectations explain the planned age of retirement.

Design/methodology/approach

An online survey was administered in 2015 to employees aged 45 and over working at a Canadian firm in the high-technology sector.

Findings

The results show that career commitment, attachment to work and expectations relating to workplace adjustments prior to retirement were positively associated with planned retirement age, whereas expectations relating to professional development showed a negative association with this variable.

Practical implications

This study fits into a line of research focusing on the end-of-career period and sheds light on the decision to retire by looking closely at the impact of employment conditions and human resource management practices on this decision. In a labor market context marked by high numbers of workers aged 55 and older, combined with the increasingly critical need for skilled labor and considering the expectations of workers leading up to their retirement could help to better plan these workers' end-of-career period.

Originality/value

Many studies have examined the characteristics of retirees after retirement. The authors’ study is one of the few that examines the aspirations of workers between the ages of 45 and 55 who are still employed but are beginning to consider their retirement plans, including the decision to continue working longer. Its originality also lies in combining work-role attachment theory and met expectations theory.

Details

Equality, Diversity and Inclusion: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-7149

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Book part
Publication date: 7 November 2017

Andrew Weyman, Thomas Klassen and Heike Schröder

We discuss workforce management, related to those aged 50+ , in the United Kingdom and the Republic of Korea. With international competitiveness becoming increasingly…

Abstract

We discuss workforce management, related to those aged 50+ , in the United Kingdom and the Republic of Korea. With international competitiveness becoming increasingly crucial, retaining the ‘right’ mix of employees to achieve strategic organisational goals is likely to determine organisational success. However, we argue that workforce management is not only influenced by organisational-level strategy but also by national institutional and sectoral policies. Decisions on whether and how to retain older workers are therefore (co-)determined by institutional incentives and barriers to doing so.

We find that British and Korean governments have legislated in favour of extended working lives and, hence, the retention of ageing workforces. In the United Kingdom, pension eligibility ages are being increased and in Korea mandatory retirement age has been raised to age 60. While changes to the UK pension systems leave individuals with the (financial) risks associated with extended working lives, the Korean government tries to protect individuals from financial hardship by enabling them to remain longer in their primary career. However, whether and how government regulation plays out depends on how organisations react to it. The Korean discussion, in fact, shows that there might be leeway: organisations might continue to externalise their employees early framed as honourable, or voluntary, early retirement, which might not be in the interest of the individual but very much in the interest of the organisation. It therefore appears as if the retention of ageing staff is not (yet) considered to be of strategic importance by many organisations in these countries.

Details

Managing the Ageing Workforce in the East and the West
Type: Book
ISBN: 978-1-78714-639-6

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Book part
Publication date: 9 April 2008

Kristian Bolin, Matias Eklöf, Daniel Hallberg, Sören Höjgård and Björn Lindgren

In the 1990s, individuals aged 18–64 were eligible for disability insurance, if their work capacity was reduced by at least 25 percent (50 percent before 1993). In the…

Abstract

In the 1990s, individuals aged 18–64 were eligible for disability insurance, if their work capacity was reduced by at least 25 percent (50 percent before 1993). In the beginning of the period, before 1991, disability insurance could also be granted for labor market reasons (i.e., if unemployed had been compensated long enough to exhaust their benefits – obtained benefits for 300 days). This possibility was gradually phased out after 1991. In 1995, the enforcement of the rules was tightened. When evaluating applications for disability pensions, local insurance offices now had to request a medical certificate and a work-related test of the applicant's degree of work capacity. Local offices also had to consult the applicant's employer, physician, or other qualified personnel, and even pay personal visits to the applicant. The possibilities for rehabilitating the applicant should also be investigated. From 1997, work incapacity should be evaluated in relation to all possible employment opportunities. Potential income changes resulting from changes in employment should not affect the evaluation4 (National Social Insurance Board, 2005).

Details

Simulating an Ageing Population: A Microsimulation Approach Applied to Sweden
Type: Book
ISBN: 978-0-444-53253-4

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Book part
Publication date: 10 November 2014

Alan L. Gustman and Thomas L. Steinmeier

This paper advances the specification and estimation of econometric models of retirement and saving in two earner families. The complications introduced by the interaction…

Abstract

This paper advances the specification and estimation of econometric models of retirement and saving in two earner families. The complications introduced by the interaction of retirement decisions by husbands and wives have led researchers to adopt a number of simplifications. Our analysis relaxes these restrictions. The model includes three labor market states, full-time work, partial retirement, and full retirement; reverse flows from states of lesser to greater work; an extended choice set created when spouses make independent retirement decisions; heterogeneity in time preference; varying taste parameters for full-time and part-time work; and the possibility of changes in preferences after retirement.

Details

Factors Affecting Worker Well-being: The Impact of Change in the Labor Market
Type: Book
ISBN: 978-1-78441-150-3

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Book part
Publication date: 1 October 2008

Alan L. Gustman and Thomas L. Steinmeier

Using data from the Health and Retirement Study, we examine behavioral responses to a new generation of retirement policies that on average are actuarially neutral…

Abstract

Using data from the Health and Retirement Study, we examine behavioral responses to a new generation of retirement policies that on average are actuarially neutral. Although many conventional models predict that actuarially neutral policies will not affect retirement behavior, our model allows those with high-time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits. Thus together with liquidity constraints facing those with high-time preference, we find that actuarially neutral policies do affect retirement behavior. One such policy follows on the elimination of the Social Security earnings test for those over normal retirement age, and would eliminate the earnings test between early and normal retirement age. Another of these policies would increase the ages of benefit entitlement. Still another such policy emerges from a central focus of the past few years on the adoption of personal accounts. Although Social Security benefits are currently paid in the form of an annuity, benefits from either defined benefit plans or from personal accounts may be made available as an annuity or as a lump sum of equivalent actuarial value. A related policy choice between actuarially equivalent benefits emerges on the pension side. There has been discussion of relaxing the current IRS prohibition against paying a pension benefit when a person remains at work, instead allowing partial pension benefits to be paid to those who partially retire on a job.

Details

Work, Earnings and Other Aspects of the Employment Relation
Type: Book
ISBN: 978-1-84950-552-9

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Book part
Publication date: 14 July 2004

Kerwin Kofi Charles

This paper assesses how retirement – defined as permanent labor force non-participation in a man’s mature years – affects psychological welfare. The raw correlation…

Abstract

This paper assesses how retirement – defined as permanent labor force non-participation in a man’s mature years – affects psychological welfare. The raw correlation between retirement and well-being is negative. But this does not imply causation. In particular, people with idiosyncratically low well-being, or people facing transitory shocks which adversely affect well-being might disproportionately select into retirement. Discontinuous retirement incentives in the Social Security System, and changes in laws affecting mandatory retirement and Social Security benefits allows the exogenous effect of retirement on happiness to be estimated. The paper finds that the direct effect of retirement on well-being is positive once the fact that retirement and well-being are simultaneously determined is accounted for.

Details

Accounting for Worker Well-Being
Type: Book
ISBN: 978-1-84950-273-3

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Book part
Publication date: 7 November 2017

Dirk Hofäcker, Simone Braun and Matt Flynn

This chapter explores whether and how does the interplay of institutional context and management interventions lead older workers to delay retirement in Germany, the…

Abstract

This chapter explores whether and how does the interplay of institutional context and management interventions lead older workers to delay retirement in Germany, the United Kingdom and Hong Kong. The most important factors that influence retirement plans are placed on three analytical levels: the individual, the workplace and the institutional levels. It explores the importance of these factors and their cross-national variation in three different countries, namely Germany, the United Kingdom and Hong Kong. Using three national datasets we explore the relationship between the aforementioned factors via descriptive statistics and linear regression models. Institutional regulations seem to matter for retirement plans. But within countries, plans show varying patterns across social groups (lower educated, financially disadvantaged). The comparative design does not allow analysing specific institutional features directly, but findings are indicative for the fact that individuals take institutional frameworks into account when planning retirement transitions. The findings call for regime-specific solutions and future policies, for example, age-friendly workplace conditions and opportunities for requalification and mobility in Germany, rising retirement ages and greater financial security via more generous universal pension rights in Hong Kong and the United Kingdom.

Details

Managing the Ageing Workforce in the East and the West
Type: Book
ISBN: 978-1-78714-639-6

Keywords

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Book part
Publication date: 6 August 2018

Alan L. Gustman and Thomas L. Steinmeier

A dynamic model of the evolution of health for those over the age of 50 is embedded in a structural, econometric model of retirement and saving. Effects of smoking…

Abstract

A dynamic model of the evolution of health for those over the age of 50 is embedded in a structural, econometric model of retirement and saving. Effects of smoking, obesity, alcohol consumption, depression, and other proclivities on medical conditions are analyzed, including hypertension, diabetes, cancer, lung disease, heart problems, stroke, psychiatric problems, and arthritis. Compared to a population in good health, the current health of the population reduces retirement age by about one year. Including detailed health dynamics in a retirement model does not influence estimates of the marginal effects of economic incentives on retirement.

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