1 Jürgen Bauknecht* | Andreas Cebulla^ | Mikkel Barslund°* Institute of Gerontology at TU Dortmund University ^ SA Centre for Economic Studies, University of Adelaide ° Centre for European Policy Studies, Brussels Working conditions and retirement: how important are HR policies in prolonging working life? ‘Work, Age and Employment – Evidence from Longitudinal Studies (WAHE 2016)’ University of Wuppertal, Germany, September 21st 2016

2 Contens 1. Working conditions and longer working lives2. State of research for 9 work satisfaction components 3. Data 4. Results 1 – 5 5. Evaluation of maximum effects 6. Summary and conclusions

3 1. Working conditions and aspects of longer working livesMacro (primarily national policies) Pensions, unemployment, disability, subsidies/tax breaks Meso (companies/organisations, social partners) Labour supply (e.g. workability-measures for health, skill development, motivation) Labour demand Micro (not as field of action) Determinants e.g. family status, health status, attitudes Meso level measures → micro level factors → retirement behaviour Field of action Empirical basis

4 HR components → retirement/not

5 2. Work satisfaction componentsMy job is physically demanding. I am under constant time pressure due to a heavy workload. I have very little freedom to decide how I do my work. I have an opportunity to develop new skills. I receive adequate support in difficult situations. I receive the recognition I deserve for my work. Considering all my efforts and achievements, my [salary is/earnings are] adequate. My [job promotion prospects/prospects for job advancement] are poor. My job security is poor.

6 2. State of research (1/6) 1. Job is physically demanding→ early labour market exit (8 longitudinal quant. studies, van den Berg et al. 2010) → disability retirement (Krause et al. 1997) → retirement intentions (for job demands and emotional demands, Burke et al. 2012) → recovery needs and following labour market exit (Schreur et al. 2011) → early retirement (Szubert/Sobala 2005) → disability retirement due to musculosceletal diseases (Lahelma et al. 2012) → weaker effects on early retirement intentions than mentally demanding work (von Bonsdorff et al. 2010) → no evidence for work exit (Carr et al. 2016) → no evidence for retirement intentions (Henkens/Leenders 2010) → no significant effects on labour market participation (Fleischmann et al. 2013) → evidence for any kind of early retirement only for women, for disability retirement men and women (Blekesaune/Solem 2003)

7 2. State of research (2/6) 2. Time pressure→ lower probability of bridge employment (Wang et al. 2008) → frequent deadlines and time pressue lead to disability exit (Krause et al. 1997) → work overload leads to early retirement intentions (Burke et al. 2012) → autonomy over work pace increases probability of labour market participation (employed or unemployed in contrast to e.g. being retired, Fleischmann et al. 2013) → job demand index (2/4 variables on time pressure) no considerable effects on early retirement for men, and statitsically insignificant for women (Mein et al. 2000) → effects of job pressure only on early retirement intentions but not on early retirement (van Solinge/Henkens 2013) → effects on workload on early retirement intentions not significant, possibly due to the inclusion of ‚burnout factors‘ (Henkens/Leenders 2010) → no effect from ‚psychsocial demands‘ (incl. fast work and time pressure) on labour market exit (Carr et al. 2016)

8 2. State of research (3/6) 3. Very little freedom to decide how to do work → job control negatively affects early retirement intentions (Elovainio et al. 2005) → job control foster work enjoyment which lower early retirement intentions (Schreur et al. 2011) → Low job control increases likelihhod of depressive symptoms which fosters early retirement (Lunau et al. 2013) → decision authority negatively affects work exit (Carr et al. 2016) → job control lowers probability of disability due to musculoskeletal diseases and especially mental disorders (Lahelma et al. 2012) → autonomy over work fosters probability to be in work or unemployed (Fleischmann et al. 2013) → no significant association between low autonomy and expected retirement age, but low-n (Beehr et al. 2000) → no effects of autonomy on later retirement (Henkens/Lenders 2010) → effect of autonomy on willingnes to continue to work not signficant, but low-n (Shacklock/Brunetto 2008) 4. Opportunity to develop new skills DE / NL: Re-introduction of job-search requirements for older unemployed: Lower reservation wages, higher re-employment probability, partly exit to disability scheme [Duell/Vogler-Ludwig 2012, Bloemen et al. 2011, s.a. Lammers et al. 2013]

9 2. State of research (4/6) → no results found so far4. Opportunity to develop new skills → no results found so far 5. Adequate support in difficult situations → negative effect of co-worker support on disability retirement insignificant but signficant with supervisor support (Krause et al. 1997) → effect on early retirement intentions but weak on actual retirement behaviour (van Solinge/Henkens 2013) → low social support fosters labour market exit (disability physical/mental see above) (Lehalma et al. 2012) → low social support fosters early labour market exit, but unstable significance (Carr et al )

10 2. State of research (5/6) 6. Recognition considered adequate and7. Earnings considered adequate → negative effort-reward imbalance and negative assessment of justice harms health (Kivimäki et al. 2007, Fischer/Sousa-Poza 2007, Lunau et al for depression). Since health affects retirement behaviour (e.g. Wang et al. 2008, Behr et al. 2000, Szubert/Sobala 2005) subjective negative injustice foster labour exit 8. Promotion prospects poor → also part of justice in 6. and 7., Kivimäki et al. 2007) → Subjective promotion prospects, opportunities for growth and absence of feeling of dead end delays retirement (van Solinge/Henkens 2013) → negative effects of opportunities for growth on early retirement intentions (Henkens/Leenders 2010)

11 2. State of research (6/6) 9. Job security is poor→ job insecurity as main driver of early retirement (Winter-Ebmer et al. 2011) → fear of losing job delays retirement (Debrand/Sirven 2009)

12 HR components → job satisfaction → retirement/not

13 3. Data SHARE

14 4. Results (1/5) How well does HR component predict overall job satisfaction? (Odd ratios going from worst to best, ordered logit [<1 neg]). IV turned to positive direction Physical demanding 0.9 Time pressure 1.45** Little freedom 2.26*** Develop new skills 2.73*** Support 1.98*** Recognition 5.31*** Salary 2.9*** Prospects for promotion 1.08 Job security 2.22*** N=23,791, 75 > age >=50, employed. **: p = 0.05, ***: p = 0.001

15 4. Results (2/5) Most people ‚satisfied‘ or ‚very satisfied‘ with jobHigh education Low education 50-54 55-59 Strongly agree 48 51 39 40 Agree 46 41 52 Disagree 5 6 7 Strongly disagree 1 2 3 SHARE wave 1, 2004.

16 4. Results (3/5) Average number of years worked after 2004, (descriptive, no controls) Maximum 9 years (for data reasons 2004 – 2013) Satisfied with job High edu Low edu 50-54 55-59 Strongly agree 6.8 5.2 6.3 4.4 Agree 6.4 4.7 5.9 4.3 Disagree 4.9 4.0 Strongly disagree 6.2 2.7 SHARE various waves. Low number of observations in ‚disagree‘ and ‚strongly disagree‘ cells

17 4. Results (4/5) Effect of overall work satisfaction on number of years worked (2004, 2007, 2011, 2013) Working years (one of several specifications with similar results) Average number of years worked for y/o: 7.1 50-54 y/o Base 55-59 y/o -3.7*** 60-64 y/o -6.6*** Women -0.3*** Strongly dissatisfied Dissatisfied -0.01 Satisfied 0.41* Strongly satisfied 0.63** Controls for interview year and country years = 7.5 months N=20, 201, 50<= age <65. SHARE various waves.

18 4. Results (5/5) Percentage wanting to retire ‘as early as possible’ by education, work satisfaction and age groups, age Very low n in ‘disagree’ ‘strongly disagree’ espc. Older groups → even amongst those satisfied a high share wants to quit asap

19 5. Evaluation of maximum effects (1/4)Rise of the legal retirement age DE: + 2 years: Simulation analysis: ~ 11 months later retirement [Fehr et al. 2010] DE: Rise of statutory retirement age and of early retirement age by 2 years: Projection: men + 9 months (based on old system) [Berkel/Börsch-Supan 2004] NL: Rise (public sector workers) by 1 year: Retirement expectations + ~ 7 months by 2 year: Retirement expectations + ~ 11 months (men 7 months, women 17 months, largely due to higher incomes amongst men, who can afford pension cuts due to earlier retirement. Also weak effects amongst those with pension entitlements in the 2nd and 3rd pillar [de Grip et al. 2013] ES: Rise of statutory retirement age from 65 to 68: Projection: + 20 months [Díaz-Giménez/Díaz-Saavedra 2009, 2014].

20 5. Evaluation of maximum effects (2/4)Rise of the legal retirement age US: + 2 months: Projection: + 1 month or 12/18 months for 2/3 years [Mastrubuoni 2006] FI: Rise of entry age in regular pension, part-time pension and the unemployment tunnel by 2 years: Projection: + 6 months [Määtänen 2014] FI: Rise of the retirement corridor → Projection: years [Tikanmäki et al. 2015] Benefit rises for later retirement ES: Rise of retirement benefits due to longer working lives actuarilly fair, so not 3% at age 65 but ~ 7% annually and rising to 15.6% at age 80: Projection: + 6 working months [Díaz-Saavedra 2015]

21 5. Evaluation of maximum effects (3/4)Retirement: Other issues ES: Complete removal of restrictions to combine work with pension income: Projection: working years [Díaz-Saavedra 2015] Unemployment benefits FI: Higher age threshold for extended unemployment benefits (55 → 57): Large drop in unemployment between 55 and 59 ( → ) between 2005 and 2009, (Braconier 2010), later labour market exit by months [Kyyrä 2010]

22 5. Evaluation of maximum effects (4/4)Disability schemes DE: Closure of disability insurance exit pathway: Projection: + 7 months for men and 2.5 months for women [Jürges et al. 2014] FI: Abolishment of disability scheme ‚individual early retirement‘ (has been done for those born after 1943): Projection: working months [Kyyrä 2015]

23 6. Summary and ConclusionsStrong effects for small group of dissatisfied Weak effects for large group of satisfied workers Effects dwarfed by policy reforms But in contrast to policy reforms´ effects, positive HR effects important in themselves and do not come with disadvantages

24 Dr. Jürgen Bauknecht jbauk@post. tu-dortmundDr. Jürgen Bauknecht ++49 (0) Dr. Andreas Cebulla ++61 (0) Dr. Mikkel Barslund

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