Why are we still working - Explaining differences in older persons' workforce participation by individual-level characteristics
Institute for Leadership and Human Resource Management University of St. Gallen St. Gallen, Switzerland
Fachgebiet VWL 6: Angewandte Oekonometrie Technical University of Darmstadt Darmstadt, Germany
It is commonly agreed upon and has been empirically shown that in most OECD-like countries the percentage of older workers still being an active part of the workforce decreased significantly over the last 30 years. This trend sets serious pressures on national economies as it intensifies the effects of the demographic change. Reasons for this decrease have been identified in form of effects of globalisation (e.g. over-representation of older workers in shrinking economic sectors) and more recently in so-called institutional filters on the national level (e.g. pension systems, re-training activities, etc.).
While these new findings shed additional light on the late career decisions of older workers, they still seem to miss certain aspects of a holistic model of retirement behaviour. In fact, research still seems to be centred around national and institutional factors that influence retirement behaviour. As the decision regarding continued employment or exit from the workforce is a highly personal one, it seems promising to integrate further individual-level variables into an overall retirement model.
For example, it seems plausible that a person's health status influences his/her decision towards continued employment. Similarly, his/her individual savings as well as intra-family money transfers should play an important role in this regard. Also, practical family obligations like having to take care of children, parents, or partners should be analyzed as they might directly influence the amount of available time and indirectly the decision towards retirement/continued work. Besides such rather "hard" individual factors it seems worthwhile to investigate potential "soft" triggers of retirement decisions such as prevailing emotions (e.g. feeling happy, feeling sad) or future expectations towards retirement (e.g. liking to have more free time vs. fear of being bored).
By doing so, we strive to develop a more comprehensive and truly interdisciplinary understanding of older workers' retirement decisions based on both economic theories and findings from organizational psychology. For testing the study hypotheses we draw on a large empirical data set that contains representative data from both OECD and non-OECD countries.