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Occupational Transitions at Older Ages: What Moves are People Making?

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Abstract

Given the clear benefit for both public and private finances of extending work lives, many policymakers are interested in finding and promoting ways to accomplish this objective while balancing concerns for work ability at older ages. At the same time, retirement itself is transforming from a simple transition from full-time work to full and permanent retirement to more of a process, potentially occurring in several stages over a number of years. We consider a set of work transitions at ages when the largest numbers of people are retiring and potentially pursuing different paths to full and permanent retirement. Among workers who transition between occupations, the most common transitions are between those that are closely related. However, even within closely related occupations, there are no large pipelines between any two. By age 62, 57 percent of workers are no longer in the labor force, 26 percent are still in their “career” occupation, and 17 percent have changed from their career occupation to another occupation. Beginning at age 66, however, the percentages in different occupations, which may be bridge employment or unretirement, are very similar to the percentages remaining in career occupations. Occupational changes later in life tend to be accompanied by decreases in hourly earnings, suggesting that if workers are seeking flexible or part-time bridge employment, it may come at a cost.

Key Findings

  • This paper uses data from the Health and Retirement Study (HRS) to examine occupational transitions at the detailed level toward the end of working life.
  • Among workers who transition between occupations, the most common transitions are between those that are closely related. However, even within closely related occupations, there are no large pipelines between any two.
  • By age 62, 57 percent of workers are no longer in the labor force, 26 percent are still in their “career” occupation, and 17 percent have changed from their career occupation to another occupation. Beginning at age 66, however, the percentages in different occupations, which may be bridge employment or unretirement, are very similar to the percentages remaining in career occupations.
  • Occupational changes later in life tend to be accompanied by decreases in hourly earnings, suggesting that if workers are seeking flexible or part-time bridge employment, it may come at a cost.

Citation

Sonnega, Amanda, Brooke Helppie McFall, and Robert J. Willis. 2016. "Occupational Transitions at Older Ages: What Moves are People Making?" Ann Arbor, MI. University of Michigan Retirement Research Center (MRRC) Working Paper, WP 2016-352. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp352.pdf

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Project

Paper ID

WP 2016-352

Publication Type

Working Paper

Publication Year

2016