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What is Retirement? A Review and Assessment of Alternative Concepts and Measures

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  • Frank T. Denton
  • Byron G. Spencer

Abstract

Since the concept of retirement is prominent in both popular thinking and academic studies it would be helpful if the notion were analytically sound, could be measured with precision, and would make possible comparisons of patterns of retirement over time and among different populations. This paper reviews and assesses the many concepts and measures that have been proposed, summarizing them in groupings that reflect non-participation or reduced participation in the labour force, receipt of pension income, end-of-career employment, selfassessed retirement, or combinations of those characteristics. It concludes that there is no agreed measure and that no one measure dominates. Instead, new measures continue to be proposed to take account of additional refinements as new data sets become available, thereby further restricting possible comparisons. The confusing array of definitions reflects the practical problem that underlies the concept of retirement: it is an essentially negative notion, a notion of what people are not doing – namely, that they are not working. A more positive approach would be to focus instead on what people are doing, including especially their involvement in non-market activities that are socially productive, even if those activities do not contribute to national income as conventionally measured.

Suggested Citation

  • Frank T. Denton & Byron G. Spencer, 2008. "What is Retirement? A Review and Assessment of Alternative Concepts and Measures," Social and Economic Dimensions of an Aging Population Research Papers 231, McMaster University.
  • Handle: RePEc:mcm:sedapp:231
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    File URL: http://socserv.mcmaster.ca/sedap/p/sedap231.pdf
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    References listed on IDEAS

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    1. Michael Baker & Jonathan Gruber & Kevin Milligan, 2003. "The retirement incentive effects of Canada's Income Security programs," Canadian Journal of Economics, Canadian Economics Association, vol. 36(2), pages 261-290, May.
    2. Jeff Borland, 2005. "Transitions to Retirement: A Review," Melbourne Institute Working Paper Series wp2005n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Sveinbjörn Blöndal & Stefano Scarpetta, 1999. "The Retirement Decision in OECD Countries," OECD Economics Department Working Papers 202, OECD Publishing.
    4. Romina Boarini & Åsa Johansson & Marco Mira d'Ercole, 2006. "Alternative Measures of Well-Being," OECD Economics Department Working Papers 476, OECD Publishing.
    5. Frank T. Denton & Byron G. Spencer, 2000. "Some Demographic Consequences of Revising the Definition of 'Old' to Reflect Future Changes in Life Table Probabilities," Quantitative Studies in Economics and Population Research Reports 352, McMaster University.
    6. M. Shannon & D. Grierson, 2004. "Mandatory retirement and older worker employment," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 528-551, August.
    7. Courtney Coile & Jonathan Gruber, 2007. "Future Social Security Entitlements and the Retirement Decision," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 234-246, May.
    8. James Banks & Sarah Smith, 2006. "Retirement in the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 22(1), pages 40-56, Spring.
    9. Romina Boarini & Åsa Johansson & Marco Mira d'Ercole, 2006. "Alternative Measures of Well-Being," OECD Social, Employment and Migration Working Papers 33, OECD Publishing.
    10. Lumsdaine, Robin L. & Mitchell, Olivia S., 1999. "New developments in the economic analysis of retirement," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 49, pages 3261-3307 Elsevier.
    11. Marjorie Honig & Giora Hanoch, 1985. "Partial Retirement as a Separate Mode of Retirement Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 20(1), pages 21-46.
    12. Janice Compton, "undated". "Determinants of Retirement: Does Money Really matter?," Working Papers-Department of Finance Canada 2001-02, Department of Finance Canada.
    13. Baker, Michael & Benjamin, Dwayne, 1999. "Early Retirement Provisions and the Labor Force Behavior of Older Men: Evidence from Canada," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 724-756, October.
    14. Frank T. Denton & Byron G. Spencer, 1999. "Population Aging and Its Economic Costs: A Survey of the Issues and Evidence," Social and Economic Dimensions of an Aging Population Research Papers 1, McMaster University.
    15. Sarah Tanner, 1998. "The dynamics of male retirement behaviour," Fiscal Studies, Institute for Fiscal Studies, vol. 19(2), pages 175-196, May.
    16. Asch, Beth & Haider, Steven J. & Zissimopoulos, Julie, 2005. "Financial incentives and retirement: evidence from federal civil service workers," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 427-440, February.
    17. Emile Tompa, 1999. "Transitions to Retirement: Determinants of Age of Social Security Take Up," Social and Economic Dimensions of an Aging Population Research Papers 6, McMaster University.
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    Citations

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    Cited by:

    1. Finnie, Ross & Spencer, Byron G., 2013. "How do the level and composition of income change after retirement? Evidence from the LAD," CLSSRN working papers clsrn_admin-2013-21, Vancouver School of Economics, revised 29 Apr 2013.
    2. repec:dem:demres:v:37:y:2017:i:31 is not listed on IDEAS
    3. Milligan, Kevin, 2013. "Employer-provided pensions, incomes, and hardship in early transitions to retirement," CLSSRN working papers clsrn_admin-2013-24, Vancouver School of Economics, revised 29 Apr 2013.
    4. Даниелян, Владимир, 2016. "Детерминанты Пенсионного Возраста: Обзор Исследований
      [Determinants of Retirement Age: A Review of Research]
      ," MPRA Paper 73865, University Library of Munich, Germany.
    5. Milligan, Kevin, 2014. "How is economic hardship avoided by those retiring before the Social Security entitlement age?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 13(04), pages 420-438, October.
    6. Frank T. Denton & Ross Finnie & Byron G. Spencer, 2011. "The Age Pattern of Retirement: A Comparison of Cohort Measures," Quantitative Studies in Economics and Population Research Reports 446, McMaster University.
    7. Frank T. Denton & Christine H. Feaver & Byron G. Spencer, 2009. "Cohort Working Life Tables for Older Canadians," Social and Economic Dimensions of an Aging Population Research Papers 247, McMaster University.

    More about this item

    Keywords

    concepts of retirement; measures of retirement;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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