Retirement Process Among Older Men and Women

McLaughlin, Steven

Abstract

The importance of understanding patterns of work and retirement among older Americans is becoming increasingly apparent to those involved in the management of private pension plans and Social Security, as well as those concerned with social policy directed at improving the quality of life among the growing population of older men and women. Current understanding of the retirement process, however, is deficient in several important respects: empirical models used to describe older people's work patterns are based on unrealistic simplifying assumptions that seriously bias the results (particularly for women), and the labor force is typically seen as homogenous in that work behavior is implicitly assumed to be constant over all jobs. The objective of the proposed research is to employ a more realistic model of the retirement process to describe patterns of work behavior among older men and women. This model explicitly recognizes that workers move in and out of various labor force states over time. They may reduce the number of hours worked and they may change jobs, with or without an intervening period of retirement. The role of job characteristics is given particular attention in that patterns of work and retirement are hypothesized to be a function of the nature of the job. The primary method to be employed is multiple increment-decrement working life tables. This technique permits movement in and out of several employment states according to a series of transition probabilities. The proposed analysis also modifies the conventional working life table by identifying multiple labor force states on the basis of job characteristics. These working life tables will be prepared separately by sex in order to examine sex differences in the retirement process. Sex-specific working life tables will also be prepared at two points in time, permitting an assessment of recent changes in the work behavior of the older population.