Is the Reduction in Older Workers' Job Tenure a Cause for Concern?
AbstractUsing data from the Health and Retirement Study (HRS), we analyze trends in voluntary, pressured, and forced quits and risk factors associated with each type of quit. We show that leaving one's age-50 job between ages 50 and 56 in any of the above circumstances more than doubles the likelihood that an individual will be working part-time at age 60, relative to a base case of working full-time. Pressured and forced quits also substantially increase the likelihood that the individual will not be working for pay at that age. Statistical tests confirm that pressured quits represent a separate and distinct category with its own risk factors and that they cannot be regarded as a subset of either voluntary or forced quits. We further show that job loss between ages 50 and 56, regardless of the circumstances, is associated with "messy" post-displacement employment histories that are not fully captured by analyses that focus solely on the first post-displacement job. The effects of job displacement are long-lasting. Displaced workers are more likely to job-hop, to suffer further involuntary job losses, and to experience subsequent unemployment than those who were still working for their age-50 employer at age 56. Accumulating sufficient resources to provide an adequate income in retirement requires most individuals to work well into their 60s, preferably in well-paid, pensioned employment. Individuals who separate from their age-50 employer for whatever reason are at risk of missing out on their peak savings years and failing to prepare adequately for retirement.
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Bibliographic InfoPaper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2010-19.
Length: 29 pages
Date of creation: Dec 2010
Date of revision: Dec 2010
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This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-02-05 (Economics of Ageing)
- NEP-ALL-2011-02-05 (All new papers)
- NEP-LAB-2011-02-05 (Labour Economics)
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- William T. Dickens & Robert K. Triest, 2012. "Potential effects of the Great Recession on the U.S. labor market," Working Papers 12-9, Federal Reserve Bank of Boston.
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