Physical Job Demand and Early Retirement

Source: Sepideh Modrek, Mark Cullen, Working paper, presented at 4th Annual Joint Conference of the Retirement Research Consortium, August 2-3, 2012

In this study we explore whether higher physical job demand predicts earlier (normal) retirement once we account for health and wealth. We then examine whether the timing of pension eligibility, which is determined by tenure and age, is more important in inducing retirement for those with more physically demanding jobs. Finally, we examine whether pension payouts or wealth accumulation induces retirement differentially for those with more physically demanding jobs….. Our study relies on an extraordinarily rich administrative data source from a large multi-site aluminum-manufacturing employer, Alcoa. …Those in the lowest demand jobs are estimated to work 16% longer relative to those in the medium demand, and those in high demand jobs retire 17% earlier relative to the medium demand group. We also find that that recent injury history is associated with earlier retirement. Finally, while we find evidence of a strong ‘pull’ effect of pension eligibility, pension payouts and 401K-wealth accumulation, there is limited evidence of a difference by job demand, though we find that those in physically demanding jobs who participate in the 401K schemes retire earlier.
Hard Labor Spells Earlier Retirement
Source: Boston College, Center for Retirement Research, Financial Security Project, Squared Away Blog, August 14, 2012

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