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Employment of Older Workers

Diversity In Late-life Employment Transitions

A great deal of diversity characterizes employment behavior in later life. Once considered a "crisp" transition between work and nonwork, the transition to retirement is now regarded as a process rather than an event, with many individuals spending years negotiating a "blurred" transition from worker to retiree (Mutchler, Burr, Pienta and Massagli). For many older individuals, the last years of employment are characterized by repeated moves in and out of the work force, along with job changes and fluctuation between full- and part-time work.

Many factors shape whether individuals continue working in later life. Some of the most important factors include the extent to which they can afford not to work, their physical ability to continue working, and their desire to engage in activities that compete with paid labor. In part because the decision to work or retire is so complex and depends on many factors, workers display a variety of pathways through the final years of their work lives. Some workers retire gradually, reducing their hours of work to accommodate their desire for leisure or their changing health or family circumstances, while retaining the financial and other benefits of working. Others change jobs relatively late in life, retiring from long-term employment once they are eligible for pension income and taking on new careers, or shifting to "bridge jobs" that may offer lower status and fewer hours. Some individuals who have retired in their fifties or earlier subsequently return to work either because additional income is required, or because the stimulation or social contact provided by work is desired. Still others never formally retire at all—experiencing in later life a series of short-term or part-time jobs that represent a continuation of work instability throughout the life course.

Gradual retirement from career jobs. Surveys suggest that many older people would like to retire gradually rather than leave the labor force abruptly. For many, the opportunity to remain employed at the same job on a part-time basis, while beginning to draw retirement income, is very appealing. And, because many of today's older people are relatively free from physical disability, gradual retirement provides an attractive alternative to leaving the labor force altogether. Yet gradual retirement is often difficult to negotiate. For example, Quinn, Burkhauser, and Myers estimate that only about one-quarter of those leaving career jobs shift to part-time employment on the same job. Although personal preference plays a part in shaping this low rate of gradual retirement, organizational and institutional barriers are also important. Many employers and private pension plans are unwilling to facilitate gradual retirement. Moreover, until the policy was changed in 2000, many older individuals eligible for Social Security received reduced benefits if they received too much wage or salary income.

Bridge jobs. Rather than remain working at one's existing job or retiring completely, some older individuals change jobs late in their work lives. If an older individual wants to continue working, a job change may be required if his or her existing job is no longer acceptable (for example, if the work is too physically demanding, or if the employer cannot meet the individual's desire for part-time work). Moreover, although mandatory retirement is no longer legal for most workers, some older individuals experience pressures to retire before they would like. Regardless of the reason for job loss, many older individuals need or want to work. These individuals often seek "bridge employment" to span the time period between retirement from or loss of one's career job and permanent retirement (Ruhm).

The kinds of jobs chosen by individuals seeking bridge employment are typically part-time and offer a considerable amount of flexibility. However, they also often pay poorly and offer few benefits, and many of these jobs represent declines in occupational status from the career job. Self-employment is chosen by many as a type of bridge employment in the later years of work life (Quinn and Kozy).

Returning to employment. Some evidence suggests that it is not uncommon for retirees— especially those leaving employment in their fifties or earlier—to return to work following a period of full-time retirement. Although some of these returns may be motivated by a revised assessment of the appeal of nonwork, the evidence suggests that returns to employment commonly occur because retirees are seeking the income and noncash benefits associated with work. Individuals retiring in their fifties will not typically be eligible for Medicare for many years, and the desire for employer-provided or employer-subsidized health insurance coverage alone may be a motivating force for a return to work. Early retirees may also discover that their pension resources are inadequate to maintain the standard of living desired. Herz suggests that younger retirees may experience retirement with a lower accumulation or more rapid depletion of pension resources than they might have expected had they continued working. Beyond these factors, the low-unemployment environment of the late twentieth century may have generated a greater need for older workers and the emergence of more attractive work opportunities.

Jobs of older workers. The kinds of jobs held by older workers reflect the fact that fewer than half of the population over age sixty-two is employed. Those who are employed in later life are different from those who have retired in many ways, which has implications for the kinds of jobs they hold. Some of those who are working beyond this point are individuals who take great personal satisfaction from their jobs, such as some professionals and some people who are self-employed. Other older workers continue employment because they need the money, and their job opportunities may be less intrinsically satisfying. Some industrial shifts have reduced the employment prospects for older workers, such as the loss of manufacturing jobs; but emerging opportunities in the service and sales sectors have been beneficial, especially for those older workers desiring part-time, flexible, or less physically demanding work (Quadagno and Hardy). Overall, the kinds of jobs held by older workers are not dramatically different from those of their younger counterparts. Among the most common occupational categories for all age groups over age forty are executives, professionals, and administrative support positions such as clerical workers. Compared to middle-aged workers, a somewhat larger share of workers sixty-five and over are in sales, service, or farming occupations (U.S. Bureau of the Census).

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