The Role of Occupational Switching on Retirement of American Midlife Workers

An increasing number of midlife Americans are financially unprepared for retirement. This is a problem because of the increasing life expectancy that prolongs the need for financial resources. One way to resolve this problem is to postpone full retirement by having bridge jobs that provide more time to work and accumulate retirement savings. While having a bridge job means numerous labor market behavior such as working for different employers and reducing work hours and intensity, there is a limited number of studies focused specifically on how switching occupations can contribute to retirement decisions with a longer time frame. This study investigated the association between occupational switching and retirement patterns of American midlife workers aged between 50 to 59 years using the Health and Retirement Study longitudinal data from 2004 to 2016, Occupational Information Network data, and American Community Survey from 2003 to 2016. The changes in occupational demandingness before and after switching occupations were reflected by using mover design event study regression with fixed effects. In general, occupational switching is associated with later retirement until two to three years after switching occupations for both genders, yet this association varies by the directions of the change in occupational demandingness.