Michael D. Giandrea

Bridge Jobs A Comparison Across Cohorts

Are todays retirees following in the footsteps of their older peers with respect to gradual retirement? Recent evidence from the Health and Retirement Study (HRS) suggests that most older Americans with full-time career jobs late in life moved to other jobs prior to complete labor force withdrawal. The authors explored the retirement patterns of two cohorts of individuals from the HRS. One group (the war babies) was born between 1942 and 1947 and therefore aged 59 to 64 years at the time of their fifth biennial HRS interviews in 2006. The others (the original HRS respondents) were aged 59 to 64 in 2000 and therefore 6 years older. The war babies have followed the gradual-retirement trends of their predecessors. Traditional one-step retirement appears to be fading as the effects of changes in the retirement environment continue to unfold.

Evolving Patterns of Work and Retirement

This chapter describes how the retirement patterns of older Americans have evolved since the turn of the last century. From the early 1900s to the mid-1980s, as the country grew more prosperous, Americans spent a portion of their increased wealth on additional leisure later in life in the form of earlier retirements. Since the mid-1980s, however, both older men and women have been working longer than prior trends would have predicted, largely in response to changes in economic incentives that favored work over leisure. The pathways to labor force exit have evolved as well. The stereotypical one-step view of retirement fails to capture the reality for most Americans, for whom retirement is not a single event, but rather a process. In the future, the strains of an aging society suggest that retirement patterns will continue to evolve, with continued work later in life playing a key role.

Are Gender Differences Emerging in the Retirement Patterns of the Early Boomers

Controlling for career employment later in life, the retirement patterns of men and women in America have resembled one another for much of the past two decades. Is this relationship coming to an end? Recent research suggests that the retirement patterns of the Early Boomers – those born between 1948 and 1953 – have diverged from those of earlier cohorts. Gender differences appear to be emerging as well in the way that career men and women exit the labor force, after nearly two decades of similarities. This paper explores these gender differences in detail to help determine whether we are witnessing a break in trend or merely a short-term occurrence. We use data on three cohorts of older Americans from the nationally-representative, longitudinal Health and Retirement Study (HRS) that began in 1992. We explore by gender the types of job transitions that occur later in life and explore, in particular, the role of four potentially relevant determinants: the presence of dependent children; a parent in need of caregiving assistance; occupational status on the career job; and self-employment status. We find that, among career men and women, child and parental caregiving are not significant drivers of the retirement transitions of the Early Boomers, all else equal. Gender differences that may exist with respect to these characteristics are therefore unlikely to lead to persistent gender differences in retirement patterns. In contrast, self employment continues to be a statistically significant determinant of bridge job transitions and phased retirement. This finding, combined with the fact that men are much more likely than women to be self employed later in life, could lead to some differences by gender going forward, though the impact is likely to be limited given that the large majority of older workers are in wage-and-salary employment. Older Americans – both men and women – are responding to their economic environment by working later in life and exiting the labor force gradually. While some determinants of these decisions likely impact men and women differently, gender differences with respect to the retirement patterns of the Early Boomers appear to be the result of broader macroeconomic forces. The evidence to date suggests that gender differences may dissipate as the recovery ensues.