Job Demand and Early Retirement

Abstract

Policy initiatives such as increases in the full retirement age implicitly reduce benefits for early retirement. Yet research suggests that those in physically demanding jobs may be particularly adversely affected by such policies. We examine to what extent physical job demand relates to early retirement decisions in a population of aging manufacturing workers. We follow a cohort of approximately 1,500 stably employed male Alcoa employees aged 51-58 in 2001 followed forward to 2008. We use a variety of models to examine whether externally rated physical job demand at middle age is related to early retirement. We also examine whether pension eligibility and payouts induce earlier retirement, especially for those with more physically demanding jobs, while accounting for wage differentials, injury history, and underlying health. Our results suggest that workers whose jobs have high physical demand retire earlier after accounting for the wage differential and health. We also find that the minority of workers who transition to lower demand jobs, due to previous injury or health issues, are less likely to retire early. Finally, while we find evidence that pension eligibility and wealth accumulation induce earlier retirement, there was limited evidence of a difference by job demand.

A Comparison of Subjective and Objective Job Demands and Fit With Personal Resources as Predictors of Retirement Timing in a National U.S. Sample

“…This finding is very consistent with research showing a strong impact on retirement of physically demanding work (Modrek, & Cullen, 2012) and physical limitations (Belbase et al, 2015), but is one of the first studies to specifically examine the interaction effect.…”

“…Job demands and particularly personal resources may change over time especially toward the end of workers’ careers. Studies that investigated the job demands within these domains have found overall that higher levels of physical effort, work stress, and cognitive demand put workers at risk for earlier retirement (Aaron & Callan, 2011; Modrek & Cullen, 2012; Wahrendorf, Dragano, & Sigerist, 2015; Willis, 2013). Interestingly, jobs that have more cognitive demands tend to be associated with white-collar work and could therefore be associated with much later retirement if demands do not exceed resources (Fisher et al, 2014).…”

A gendered approach to workforce participation patterns over the life course for an Australian baby boom cohort

“…However, education does play an important role in type of occupation (such as managerial or physical labour), and men in physically demanding jobs tend to retire early due to health issues (Modrek & Cullen, 2012). We found that partnered women and men were less likely to have decreasing full time work, as compared to mostly full time work.…”

The Effects of Job Insecurity on Health Care Utilization: Findings from a Panel of U.S. Workers

“…Each unit increase predicts a one‐fold increase in expenditures above the mean. This score predicts a variety of health outcomes (Handel ; Modrek and Cullen , ; Kubo et al. ), including mortality in higher quintiles (Hamad et al.…”