Understanding Job Transitions and Retirement Expectations Using Stated Preferences for Job Characteristics
As the population ages in the United States and other countries, encouraging older individuals to work would help counter increasing dependency ratios and improve national economic outcomes. Extending working lives is likely not simply a function of improving monetary incentives. Instead, job characteristics are also potentially important, yet understudied, determinants of whether individuals near retirement remain in the labor force. We use previously-collected data on job characteristics and preferences for job characteristics and work at older ages from the 2015 American Working Conditions Survey. We match the 2015 data with new data on job transitions collected three years after the initial survey. We use the matched data to study the relationship between preferences for job characteristics and actual job transitions. We then estimate heterogeneity in preferences for job characteristics as a function of age and plans for retirement. We test whether preferences differ for older workers ages 50 to 61 with different self-perceived probabilities of working in the future. Finally, we test whether preferences differ for retirement-aged individuals ages 62 and older who are working or not working.
- In general, workers transition to jobs with characteristics more closely aligned with their preferences. Workers who switch away from having certain attributes tend to value to those attributes less than those who remain in jobs with the same attributes. Similarly, workers who switch to jobs with certain attributes tend to value those attributes more than those who remain in jobs without the same attributes.
- We are not able to draw strong conclusions about differences between those who exit employment with certain attributes versus those who remain in jobs without certain attributes.
- Narrowing in on older workers, among those ages 50 to 61, we find weak evidence that workers who have lower expectations of working at age 62 tend to value nonwage job characteristics more than those who have higher expectations of working at age 62. However, we do not find any differences between individuals ages 62 and older who are working versus not working.
- Our findings are consistent with previous work showing that older workers tend to value nonwage working conditions more than younger workers.
Maestas, Nicole, Kathleen J. Mullen, David Powell, Till von Wachter, and Jeffrey Wenger. 2019. “Understanding Job Transitions and Retirement Expectations Using Stated Preferences for Job Characteristics.” Ann Arbor MI: University of Michigan Retirement Research Center (MRRC) Working Paper, WP 2019-396. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp396.pdf
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Paper IDWP 2019-396