Retirement Patterns from Career Employment

Abstract

Purpose: This paper investigates how older Americans leave their career jobs and estimates the extent of bridge job activity between full-time work on a career job and complete labor force withdrawal. Methods: Using data from the Health and Retirement Study (HRS), we explore the work histories and retirement patterns of a cohort of retirees aged 51 to 61 in 1992 over a ten-year time period in both a cross-sectional and longitudinal context. Bridge job determinants are examined in a multinomial logistic regression model of the bridge job decision. Results: We find that a majority of older Americans with career jobs retire gradually, in stages, rather than all at once. We also find that bridge job behavior is most common among younger respondents, respondents without defined-benefit pension plans, and respondents at the lower-end and at the upper-end of the wage distribution. Implications: Older Americans are now working longer than pre-1980s trends would have predicted. Given concerns about the traditional sources of retirement income (Social Security, defined-benefit pensions, and prior savings), older Americans may have to rely more on earnings. This paper suggests that many are already doing so, by moving to bridge jobs after leaving their career employment.

Keywords: Economics of Aging, Partial Retirement, Gradual Retirement

JEL Classification: J26, J14, J32, H55