Employment, late-life work, retirement, and well-being in Europe and the United States

Abstract

Flexible work arrangements and retirement options provide one solution for the challenges of unemployment and underemployment, aging populations, and unsustainable public pension systems in welfare states around the world. We examine the relationships between well-being and job satisfaction on the one hand and employment status and retirement, on the other, using Gallup World Poll data for several European countries and the United States. We find that voluntary part-time workers are happier, experience less stress and anger, and have higher job satisfaction than other employees. Using statistical matching, we show that late-life workers under voluntary part-time or full-time arrangements have higher well-being than retirees. There is no well-being premium for involuntary late-life work and self-employment compared to retirement, however. Our findings inform ongoing debates about the optimal retirement age and the fiscal burdens of public pension systems.

Late-life work and well-being

“…In addition to the wellknown negative effects of unemployment on well-being, there are documented positive effects related to late-life work and to voluntary part-time work [1]. There may also be positive externalities for health and for labor productivity, among other benefits, as the research on well-being also finds strong and reinforcing links between well-being and better health and higher productivity.…”

“…In addition to the general trends, the employment statistics vary by country [1]. Germany and the UK had the highest proportion of voluntarily employed part-time workers (11%), while Greece and Portugal had the lowest (3%).…”

“…In the US older workers receive a pay premium relative to their younger counterparts, suggesting that they are more productive [6]. Older workers may also play a role in training younger workers and apprentices, and some of the fiscal contributions from postponed retirement could be used to finance apprenticeships and training programs [1]. And as there is a shortage of skilled labor in some occupations, well-trained part-time older workers could fill multiple roles.…”

“…Novel data in the Gallup World Poll allows for further exploration of these relationships across several dimensions of well-being [1]. Evaluative metrics allow for assessing satisfaction with life as a whole, including over the lifecycle, while hedonic metrics capture well-being-including positive and negative affect, such as smiling and stressas people live their daily lives.…”

“…Research using the Gallup World Poll data focused on countries with roughly similar per capita income levels, labor markets, and demographic structures (France, Germany, Greece, Italy, Portugal, Spain, Sweden, Turkey, the UK, and the US) and explored the relationship between employment status, work arrangements, and subjective wellbeing (including job satisfaction) [1]. The study also considered whether there are additional well-being effects of late-life work.…”