The Role of Physical Job Demands and the Physical Work Environment in Retirement Outcomes

Authors

Abstract

We provide new evidence on the role of physical job demands and the physical work environment on retirement outcomes by linking occupation-level data on job requirements from the Occupational Requirements Survey (ORS) to individual-level data from the Health and Retirement Study (HRS). Using alternative strategies to address missing data, and after examining the concurrent validity of ORS job requirements with analogous measures from the Occupational Information Network (O*NET), we create a composite index of physical job demands comprising strenuous physical activities (e.g., lifting and strength) and a composite index of physical work environment comprising hazardous or taxing environmental conditions (e.g. noise, heat). We use these validated indices to estimate associations between job demands and retirement outcomes controlling for observed individual and household characteristics. We find that a one standard deviation increase in our index of physical jobs demands is associated with a 10 percentage point increase in the probability of being retired at any age and a 1.8 percentage point increase in the probability of transitioning into full retirement from full-time work. The same size increase in our physical work environment index is associated with a 7 percentage point increase in the probability of being retired, but it does not provide additional explanatory variation for transitions into retirement. These effects are almost entirely concentrated in men, who hold jobs that are significantly more physically demanding than women’s, and they are also larger among older and less-educated workers.

Key Findings

  • We find a positive and robust association between occupational physical job demands with the probability of being retired at any age, as well as with the probability of transitioning into full retirement from full-time work.
  • These effects are almost entirely concentrated in men, and they are also larger among older workers, defined as those above the median age in the sample (67 years), as well as workers without a college degree.
  • The associations between the physical environment and retirement outcomes are generally weaker, most likely because physical activities and the physical work environment are highly correlated.

Citation

Garcia, Italo Lopez, Kathleen J. Mullen, and Jeffrey Wenger. 2021. “The Role of Physical and Cognitive Job Demands on Transitions into Retirement.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2021-437. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp437.pdf

Full Text

Download PDF

Project

Publication Type

Working Paper

Publication Year

2021