Transcript CLARK_SIEPR 2015 Robert Clark et al 10 01 15.pptx

Work after Retirement from Career
Jobs
Robert L. Clark, Robert G. Hammond, Melinda Sandler Morrill,
Aditi Pathak
Department of Economics
Poole College of Management
North Carolina State University
Need to Work Longer and Quotes from Our
Host
• Increasing life expectancy is placing a
strain on the ability of individuals, firms,
and governments to finance desired
standards of living in retirement.
• The basic economic problem is that “we
have a couple attempting to finance at
least a 30-year retirement with a 40-year
career. It won’t work”
2
Need to Work Longer and Quotes from Our
Host
• “The attempt to do the impossible (financing
30-year retirements with 40-year careers), is
an important factor in the current economic
strains being felt everywhere from the
countries of Europe to cities of California and
the midwest. ”
• Therefore, one of the most important policy
needs is to adjust “economic institutions to
dramatically longer lifetimes”
3
Leadership of Sloan Foundation
• The Sloan Foundation is shaping
economic research on working longer and
paths to retirement.
• “Americans are working later in life,
delaying retirement for a variety of
reasons. While some continue working by
choice, others need to remain in the
workforce for financial reasons.”
4
Leadership of Sloan Foundation
• Need for new research with a different
focus:
• “relatively little is known about
employment patterns, obstacles to
employment, or the ensuing economic
impact.”
5
Working Longer
• Older men and women are working longer as
life expectancy rises
• Labor force participation rates of older
workers are rising
• But this does not necessarily mean that
workers are retiring later from their career
jobs
6
Working Longer
Labor Force Participation rates of older individuals are
rising:
1992
2012
Men
60-64
54.7%
60.5%
65 and older
16.1%
23.6%
Women
60-64
36.4%
50.4%
65 and older
8.3%
14.4%
7
Public Employees
• Many public employees retire from their
career job in their 50s
• So modifying John’s statement for public
workers, public employees are trying to
finance a 40 year retirement with 30 years of
working
• Unless they follow another path into
retirement!
8
Current Research Project
• Examine the worklife transitions of public
employees and illustrate their paths to
permanent withdrawal from the LF
• Three year grant from Sloan Foundation
• Activities include three surveys of older
workers and retirees
• Surveys linked to administrative records
• Informational nudges
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Transiting into Retirement: Public
Sector Workers
Public sector workers tend to:
*have lower turnover and longer career
*be covered by defined benefit plans
*be included in retiree health plans
Are public employees more likely to
extend their worklife by seeking new
jobs after retirement?
10
Retirement from Career Job
• Many public pension plans allow individuals to
retire with unreduced benefits in their 50s/60s
after 25 or 30 years of work
• Previous studies have shown that younger
retirees are more likely to seek re-employment
after retirement
• Relatively generous pension and retiree health
benefits allow career retirees to consider a wide
range of post-retirement employment options
11
Retirement is a process not an event
• Individuals can consider a range of employment
possibilities after retiring from a career job
– Phased retirement
– Return to same employer after a break in service
• Work part-time or full-time
– Seek employment with new firms
• Bridge jobs
• Self-employment
– Leave labor force and then re-enter LF
12
Career employment
Early or Normal Retirement:
Terminate employment,
initiate benefits
Same Employer, No
Break in Service
Phased Retirement
Same Employer ,
Break in Service,
Full/Part-Time
Different Employer /
Self-Employment,
Full/Part-Time
No paid work
(Leisure, Caregiving,
Convalescence)
Return-to-work
Bridge Job
Quasi-Retirement
Permanent
withdrawal from
the labor force
Public Employees in North Carolina
• Our analysis is based on two surveys:
– Survey of older workers
– Survey of recent retirees
Both surveys are merged with
administrative records provided by the
North Carolina Retirement System
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Older Workers in North Carolina
• Survey was sent to employees aged 50-69 who were working
full-time in 2014
• Respondents included teachers and state employees along
with local government employees
• Teachers and state employees in one pension plan, local
employees in a separate but similar plan
• Teachers and state employees included in the state health plan
in retirement, some local governments provide retiree health
insurance to their retirees
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Older Workers
• 71% female, reflecting the usual gender distribution of
state and local employees
• Mostly married and mostly white reflecting the
population of the state
• Relatively highly educated sample with one third having
advanced degrees
• Average annual salary of $56,000
• 39% are school employees and 39% are state employees
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Retirement Expectations
Age at
Survey
50-54.9 55-59.9 60-61.9
62
63-64.9
50-54.9
55-59.9
60-61.9
62
63-64.9
65
66-69.9
11.8
0.0
0.0
0.0
0.0
0.0
0.0
24.0
13.7
0.0
0.0
0.0
0.0
0.0
16.9
25.0
13.1
0.0
0.0
0.0
0.0
Percent
12.7
3.8
22.0
5.5
24.3 14.0
11.6 30.5
0.0
15.3
0.0
0.0
0.0
0.0
Percent of
respondents
4.1
13.4
16.5
15.8
7.4
65
66-69.9
70
and
Above
19.6
18.6
21.2
25.3
25.2
8.3
0.0
6.9
11.5
21.6
27.4
39.6
81.3
38.5
4.4
3.7
5.9
5.3
19.8
10.4
61.5
19.1
16.3
7.4
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Work after Retirement Plans
Do Not Plan to Work
After Retirement
Plan to Work After
Retirement
Expected Retirement
Age
50-54.9
55-59.9
60-61.9
62
63-64.9
65
66-69.9
70 and above
14.1
15.5
25.5
28.2
23.0
31.5
33.0
34.3
Percent of Respondents
26.9
Full-time
Percent
25.6
15.5
9.4
5.0
6.5
5.0
5.6
5.7
8.2
Part-time
60.3
69.0
65.2
66.8
70.5
63.5
61.4
60.0
64.8
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Why Retirees Do not Plan on Working
Expected Retirement
Age
No Need Poor
to Work Health
50-59.9
60-64.9
65 and above
52.1
58.3
47.5
6.3
3.2
3.5
Percent of all
respondents
52.0
3.7
No
Longer
Working
Percent
8.3
7.5
3.1
5.3
Will Not
Be Able
to Find
Work
Other
8.3
8.0
19.6
25.0
23.0
26.3
14.1
24.9
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Table 5 Retirement Expectation of Workers
Expected Retirement
Age
Age at survey
0.493***
(0.020)
Expected retirement age
Male
Married
Black
Other race
Less than Bachelor’s degree
Master’s degree
Professional degree
Self-reported health good
Expect to Return to
Work
0.705***
(0.200)
0.660
(0.637)
-0.459
(0.282)
0.641
(0.519)
-0.119
(0.242)
0.007
(0.234)
0.542
(0.416)
0.302
-0.013***
(0.004)
0.083***
(0.030)
-0.083
(0.095)
0.024
(0.042)
0.059
(0.078)
-0.063*
(0.036)
0.039
(0.035)
0.149**
(0.062)
0.075
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Table 5 Retirement Expectation of Workers
Expected Retirement Expect to Return to Work
Age
Married*Spouse relative age
Married* Spouse health good
Married*Spouse currently
working
-0.002**
0.000
(0.001)
(0.000)
-0.086
-0.069*
(0.271)
(0.041)
-0.152
0.067**
(0.217)
(0.032)
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Table 5 Retirement Expectation of Workers
LGERS
K-12 teacher/administrator
Police/ Firefighter
University/College faculty
Annual Salary (10K)
Tenure
High financial knowledge
Expected Retirement
Age
Expect to Return to
Work
-0.370
(0.244)
-1.039***
(0.245)
-2.818***
(0.585)
0.683**
(0.287)
-0.043
(0.045)
-0.213***
(0.010)
-0.352*
(0.181)
-0.058
(0.037)
0.006
(0.037)
0.027
(0.088)
-0.014
(0.043)
-0.002
(0.007)
0.002
(0.002)
-0.041
(0.027)
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Retirement Plans: Key Findings
1. About 2/3 of employees in their 50s
expect to by age 62
a. teachers, police and fire anticipate retiring at
younger ages than general public employees
b. men expect to retire later
c. individuals with more years of tenure
anticipate an earlier retirement
d. employees with greater self-reported
financial knowledge expect to retire earlier
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Retirement Plans: Key Findings
2. Almost 75% of older workers expect to work after
retiring from public employment
a. younger retirees and men are more likely to plan
to work after retirement
b. spouse in good health, less likely to plan on
working in retirement
c. spouse working, more likely to plan on working
in retirement
d. employees with higher levels of education more
likely to plan on working in retirement
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Retirees from State and Local Jobs in
North Carolina
• Survey sent to half of all retirees with e-mail address, about
30,000 individuals
• Survey sent to individuals who retired between January 1,
2009 and December 31, 2014
• Retiree sample similar to worker sample:
– 68% female, 71% married,85% white, almost 40% with
advanced degrees, over 40% former school employees
• Retiree characteristics:
– 69% currently working, average retirement benefit of
$27,000
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Retirees from State and Local Jobs in
North Carolina
Not Currently
Working
Age at Retirement
from Public
Employment
Less than 55
55-59.9
60-61.9
62
63-64.9
65
66-69.9
70 and above
46.1
61.9
75.0
77.2
79.6
77.7
82.5
86.2
Percent of
Respondents
69.2
Retirees Are Currently Working
Same State Other State or Private
or Local
Local
Sector
Government Government
Percent
12.7
12.0
29.2
11.1
6.6
20.4
6.1
6.1
12.8
7.1
2.5
13.2
7.2
2.6
10.5
5.5
3.0
13.8
6.6
3.0
7.8
6.5
1.6
5.7
8.6
5.8
16.4
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Expectations for Returning to Work:
Individuals not Currently Working
Unlikely
Likely
Undecided
Age at retirement
Less than 55
55-59.9
60-61.9
62
63-64.9
65
66-69.9
70 and above
40.4
50.5
66.5
67.0
67.8
71.3
70.3
72.6
Percent
39.0
26.4
16.7
18.5
16.5
13.3
14.4
13.2
Percent of Respondents
61.5
20.9
20.6
23.0
16.8
14.5
15.7
15.4
15.3
14.2
17.6
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Work Status of Retirees
Age
Male
Married
Black
Other race
Less than Bachelor’s degree
Master’s degree
Professional degree
Self-reported health good
Currently Working:
Full Sample
Working in the Public
Sector: Only Workers
-0.023***
(0.002)
0.107***
(0.016)
-0.101**
(0.050)
-0.039
(0.024)
-0.004
(0.049)
-0.265**
(0.125)
-0.036**
(0.018)
0.023
(0.017)
0.106***
(0.031)
0.003
(0.003)
-0.082**
(0.033)
-0.020
(0.093)
0.017
(0.052)
-0.101
(0.099)
0.637
(0.495)
-0.041
(0.038)
-0.060*
(0.035)
-0.138**
(0.059)
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Work Status of Retirees
Annual benefit amount(10K)
Retirement account balances >250K
High Financial knowledge
Receiving LGERS benefit
Married*Spouse relative age
Married*Spouse health good
Married*Spouse currently working
1-2 children
3 or more children
Caregiving
Currently Working:
Full Sample
Working in the Public
Sector: Only Workers
0.005
(0.004)
-0.047***
(0.016)
-0.014
(0.014)
0.012
(0.019)
-0.001
(0.002)
-0.073***
(0.020)
0.152***
(0.015)
0.020
(0.018)
0.044***
(0.017)
-0.038***
(0.014)
0.028***
(0.008)
-0.015
(0.035)
-0.033
(0.029)
-0.113***
(0.040)
0.001
(0.003)
0.034
(0.043)
-0.049
(0.032)
0.044
(0.036)
0.089**
(0.035)
-0.005
(0.029)
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Planning to Return to Work
Plan to Re-enter LF
Age
Male
Married
Black
Other race
Less than Bachelor’s degree
Master’s degree
Professional degree
Self-reported health good
-0.017***
(0.002)
0.056***
(0.018)
-0.083
(0.057)
0.118***
(0.026)
0.008
(0.053)
-0.014
(0.117)
-0.028
(0.019)
0.031*
(0.019)
0.111***
(0.035)
30
Planning to Return to Work
Plan to Re-enter LF
Annual benefit amount(10K)
Retirement account balances >250K
High Financial knowledge
Receiving LGERS benefit
Married*Spouse relative age
Married*Spouse health good
Married*Spouse currently working
1-2 children
3 or more children
Caregiving
-0.029
(0.021)
-0.001
(0.004)
-0.050***
(0.017)
-0.040***
(0.015)
-0.002
(0.002)
-0.066***
(0.021)
0.093***
(0.017)
0.010
(0.019)
0.014
(0.018)
0.027*
(0.015)
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Employment by Retirees: Key Findings
1. About 30% of retirees are currently
working; half of these returned to work in
the public sector
a. older and married retirees less likely
to be working
b. respondent in good health are more
likely to be working
32
Employment by Retirees: Key Findings
c. retirees with spouse in good health
less likely to be working; if spouse is
working, respondent more likely to
be employed
d. more children and greater hours of
caregiving lowers likelihood of
working
33
Employment by Retirees: Key Findings
e. Men, individuals with higher levels of
education, and those in good health
are less likely to return to work in the
public sector
34
Employment by Retirees: Key Findings
2. Among those currently not working, 21%
think it is likely that they will return to the
LF and another 17% are uncertain of their
future plans
a. men and respondents in good health
are more likely to plan to re-enter the
LF
b. spouse’s health and work status along
with caregiving influence plans to
return to work
35
Further Analysis
• Soon a survey 3 that will follow workers
from survey 1; sample will be refreshed
with additional respondents
• Analysis of annuity choices of retiring
workers
• Further examination of retirement process
using survey data and administrative
records
36