Who does not intend to retire? Mothers' opportunity costs and compensation at later ages in Europe

Abstract

Research investigating the association between women's work–family trajectories and their retirement intentions is limited. Studies considering how different institutional conditions affect this association are even more limited. To fill this gap, we use the first three waves of the Survey of Health, Ageing and Retirement in Europe, 2004–2009, and apply two-level random effects models with country-level fixed effects to a sample of mothers aged 50–64 years. Our dependent variable is the intention to retire as early as possible. We found that the following two different mechanisms are associated with mothers' early retirement intentions: (a) strategies to compensate for opportunity costs and (b) work attachment. When all other factors are equal, mothers with a work career characterised by interruptions and part-time work intend to work longer than other mothers, indicating the need to compensate for lower lifelong earnings at older ages. Some compensatory strategies are also observed among mothers who are classified as ‘never married’, ‘divorced’ or ‘widowed’, who wish to continue their careers. In other cases, evidence supporting work attachment mechanisms is found; for instance, working when the youngest child is younger than six years predicts the intention to delay retirement. These results change according to the welfare regime, underlining the importance of family policies and pension benefits to counterbalance the effect of opportunity costs on mothers' earnings.

Family formation trends and patterns of women's work trajectories in South Korea: determinants and cohort differences

“…The lack of statistical significance is surprising, as mothers who delay family formation are expected to have more time to invest in their human capital prior to motherhood, which should increase their employment chances after family formation or even their opportunities to stay attached to the labour market during their childbearing years (Florian, 2018a;Gough & Noonan, 2013;Muller et al, 2020). Moreover, delaying childbirth (or marriage) is often seen as an indicator for strong attachment to paid work (Hank, 2004;Y. Kim & Rizzi, 2020;Pienta et al, 1994) as previous studies find that a strong attachment to paid work delays marriage and fertility (Koelet et al, 2015;Sun & Chen, 2017;Wood et al, 2016).…”

Belgian family policy from a comparative perspective: does it support fertility and gender equity?

“…Because of their lower earnings, women may be more vulnerable in the case of divorce. Moreover, in the long term, work time reduction may affect pension income (Kim and Rizzi, 2019). The Belgian family policy system takes women's work time reduction into account when calculating the pension amount in the case of leave and time credit use.…”

“…For older individuals, the Dutch policy compensates for work time reduction during one's earlier career by allowing a basic pension income corresponding to approximately 25% of average earnings. A basic pension system of more than 20% of average earnings is also applied in Sweden (Kim and Rizzi, 2019).…”

Changes in labour market histories and their relationship with paid work around state pension age: evidence from three British longitudinal studies

“…Some studies in Britain and the USA suggest that spending more years in employment during one's working life is associated with working beyond SPA for women but that this matters little for men (Pienta et al , 1994; Cahill et al , 2012; Finch, 2014; Stafford et al , 2019); but other studies in Switzerland and the USA report that both women and men with interrupted labour market histories are more likely to work in their fifties and sixties, especially among younger cohorts (Raymo et al , 2011; Clarke et al , 2012; Madero-Cabib et al , 2015). Kim and Rizzi (2020), using longitudinal European data, found that among women aged 50–64 (that is, those born between 1940 and 1957), it was those whose histories were characterised by interruptions and part-time work who intended to work for longer (Kim and Rizzi, 2020). Thus, a lack of clarity remains with respect to the relationship between women and men's labour market histories and paid work in the years up to and beyond SPA, especially once other contemporaneous factors are considered.…”