Scarring effects across the life course and the transition to retirement

Doctoral thesis (2017)

This thesis investigates the long-term negative effects of unemployment, labour market inactivity and atypical employment. Within the theoretical framework of cumulative advantages and disadvantages, it ... [more ▼]

This thesis investigates the long-term negative effects of unemployment, labour market inactivity and atypical employment. Within the theoretical framework of cumulative advantages and disadvantages, it is outlined how life-course differentiation creates gaps between age peers and cohorts and how this leads to social inequality in old age. In the three separate, but linked studies, disadvantages across the career and their associations to retirement are analysed. The focus of the analyses is laid on the outcomes of career disadvantages in form of subjective and financial well-being. The three studies all use the Survey of Health, Ageing and Retirement in Europe. This large and multidimensional panel study provides not only prospective, but also retrospective data on European countries. The data base is employed in different combinations in the studies. In the first and second study, the retrospective wave SHARELIFE provides information on employment biography and is related to well-being indicators of the regular waves. In the third study, the persistence of disadvantages upon retirement is observed with a causal model. The first study investigates how disadvantages are affecting careers and subjective well-being of older Europeans. In two complementary analyses, first the employment history of older Europeans is studied with sequence analysis methods to show how non-employment and part-time work shape careers and to illustrate gender differences. In a second step, indicators of timing and duration, exemplifying the accumulation mechanisms, are related to subjective well-being in old age. The results indicate that women experience more turbulent careers with more periods of non-employment and part-time employment. However, this is not reflected in lower subjective well-being in old age. Accumulation of non-employment disadvantages is far more comprehensive for men than for women. Part-time employment has an ambiguous effect for women, but is not relevant for men. In the second study, the household level is added and it is analysed how an adverse employment history is related to wealth accumulation. The results show that cumulative non-employment and employment in lower occupations has significant disadvantages for wealth accumulation in old age. However, large differences for men and women remain. Particularly, the household composition and household factors are decisive in the effectuality of these disadvantages. The third study includes the scarring question, that means if career disadvantages continue beyond the working life. The study examines whether non-employment disadvantages are still found in retirement and the extent to which well-being levels change in the transition to retirement. Well-being scores before and after retirement are obtained and unbiased effects of the retirement transition are identified. Results indicate that being unemployed before retirement is associated with an increase in life satisfaction, but presents mainly a catching-up effect compared to employed persons transitioning to retirement. Findings are robust to selection into unemployment and country differences. [less ▲]

Cumulative disadvantages of non-employment and non-standard work for career patterns and subjective well-being in retirement

in Advances in Life Course Research (2016), 30

This paper investigates how cumulative disadvantages of non-employment and non-standard work are affecting careers and subjective well-being of older Europeans from 13 countries. In previous research ... [more ▼]

This paper investigates how cumulative disadvantages of non-employment and non-standard work are affecting careers and subjective well-being of older Europeans from 13 countries. In previous research, unemployment, labour market inactivity and part-time work had negative effects, however they were seldom addressed in a common study and over the whole career. In two complementary analyses, first, the employment history of older Europeans is analysed with sequence analysis methods to show how non-employment and part-time work shape careers and to illustrate gender differences. In a second step, adverse career components are used to exemplify cumulative disadvantages on subjective well-being in old age. Data from the Survey of Health, Aging and Retirement in Europe (SHARE) is used for the analyses. After optimal matching and clustering of the retrospective employment history, the results indicate that women experience more turbulent careers with more periods of non-employment and part-time employment. The analyses of subjective well-being show that labour market inactivity and unemployment have negative effects in old age for men, but less for women. Part-time employment has a differentiated effect for women, however not for men. [less ▲]

Increases in well-being after transition to retirement for unemployed. Catching up with formerly employed persons.

Scientific Conference (2015, November 12)

Pension insecurity and well-being in Europe

E-print/Working paper (2015)

This paper studies pension insecurity in a sample of non-retired individuals aged 50 years or older from 18 European countries. We relate pension insecurity with the subjective expectations on the ... [more ▼]

This paper studies pension insecurity in a sample of non-retired individuals aged 50 years or older from 18 European countries. We relate pension insecurity with the subjective expectations on the probability that the government will reduce the pensions of the individual before retirement or will increase the statutory retirement age. We argue that changes in economic conditions and policy affect the formation of such probabilities, and through this, subjective wellbeing. In particular, we study the effects of pension insecurity on subjective wellbeing with pooled OLS models, regressions per quintiles and instrumental variables. We find a statistically significant, stable and negative association between pension insecurity and subjective wellbeing. The quintile regressions allow us to establish that pension insecurity is more salient for individuals who are poorer, who subjectively assess their life survival rate as low and who have higher cognitive abilities. [less ▲]

Increases in well-being after transition to retirement for unemployed. Catching up with formerly employed persons.

E-print/Working paper (2015)

This paper examines the extent to which well-being levels change in the transition to retirement depending on transitioning from being employed, unemployed, or economically inactive. Whereas transitioning ... [more ▼]

This paper examines the extent to which well-being levels change in the transition to retirement depending on transitioning from being employed, unemployed, or economically inactive. Whereas transitioning from employment to unemployment has been found to cause an increase in depressive symptoms or decline in life satisfaction with more time spent in unemployment, it is not clear to which extent transitioning from unemployment to retirement affects well-being levels compared to retiring after being employed or economically inactive. We use two waves of the Survey of Health, Ageing and Retirement in Europe monitoring respondents transitioning to retirement and use life satisfaction as well-being measure. The effect of the transition is captured with a difference-in-difference like approach to test if the change in well-being after retirement is different for persons who were formerly unemployed or inactive, respectively, compared to formerly employed retirees. Results indicate that retiring from unemployment is associated with an increase in life satisfaction, but presents mainly a catching-up effect compared to employed persons transitioning to retirement. Retirement from labour market inactivity, especially sick leave, does not lead to significant changes in well-being. Findings are robust to selection into unemployment and country differences. As well-being of unemployed persons recovers after transitioning to retirement, especially the currently unemployed population should be supported to prevent detrimental consequences of economically unfavourable conditions and lower well-being. [less ▲]

The Impact of Career Instability on Well-Being in Old Age

Scientific Conference (2014, September 25)

Scarring Effects in Old Age: The Impact of Unemployment on the Life Satisfaction in Retirement

Scientific Conference (2013, July 05)