Heterogeneity in the Retirement Process: Patterns and Determinants of Labor Force Withdrawal Among Individuals with Low-Wage and Short-Duration Jobs

TitleHeterogeneity in the Retirement Process: Patterns and Determinants of Labor Force Withdrawal Among Individuals with Low-Wage and Short-Duration Jobs
Publication TypeThesis
Year of Publication2000
AuthorsCahill, KE
Date Published2000
UniversityBoston College
KeywordsEmployment and Labor Force, Public Policy, Retirement Planning and Satisfaction
Abstract

While the retirement patterns of full-time career individuals have been closely examined in the retirement literature, much less is known about the retirement behavior of low-wage individuals and those with non- traditional work histories. Knowledge of how these groups retire is crucial in evaluating the impact of pro-work policies on older americans. The first paper of this dissertation presents a two- period theoretical model of retirement with borrowing constraints in which individuals optimize lifetime utility subject to a budget constraint by choosing the intensity of work in and the duration of period one (the working period), and the level of consumption in both periods. The model predicts that individuals with binding borrowing constraints are more likely to exit the labor force early and work full time just before complete labor force withdrawal. The two empirical papers use a nationally representative sample of 12,652 older americans who are participating in the Health and Retirement Study. The first paper focuses on individuals in the bottom 20% of a year-specific, gender-specific wage distribution (low-wage); the second focuses on individuals who have not held a job lasting at least 10 years and consisting of 1600 or more hours per year (non-full-time career). Descriptive statistics show that low-wage individuals and non-full-time career individuals differ from others with respect to health status, race, marital status, wealth, and health insurance and pension coverage. Differences also exist regarding bridge job activity and the consequences of job transitions later in life. An empirical model of retirement yields three notable findings. First, key incentive variables remain significant when examining retirement determinants of both groups. Second, low-wage individuals appear less responsive to many retirement incentives. Third, the marginal impacts of key incentive variables are not significantly altered by the exclusion of non-full-time career individuals. This research suggests that decisions concerning pro-work policies should be made in light of possible heterogeneity in the retirement processes between these two groups and the rest of the population.

URLDatabase ID: DAI-A 61/07, p. 2853, Jan 2001 0-599-88127-5
Endnote Keywords

Retirement Planning

Endnote ID

6617

Endnote Author Address

Dissertation, Dept. of Economics:

Short TitleHeterogeneity in the Retirement Process: Patterns and Determinants of Labor Force Withdrawal Among Individuals with Low-Wage and Short-Duration Jobs
Citation Key6241