Shifts in the realized retirement age: Europe in times of pension reform and economic crisis

Abstract

Many recent policy reforms aimed to delay retirement. Such a delay seems important because population ageing makes it a necessity for financially sound pension schemes and a sufficiently large workforce. However, pension reforms do not only affect when people retire, they likewise affect what influences the realized retirement age. Moreover, the 2008 economic crisis restructured labour markets, thereby affecting retirement. This article investigates recent shifts in the realized retirement age and influences on it. It does this through multilevel analyses of international data from the Survey of Health, Ageing and Retirement in Europe. It compares individuals who retired in 2005/2006 to those who retired in 2012/2013, thereby identifying changes over time. Findings show that the realized retirement age increased. Simultaneously, inequalities in the realized retirement age decreased within and between countries. Thus, while the economic crisis reshaped social inequalities, pension reforms constrained the options for retirement. Consequently, policymakers need not worry about the economic crisis defeating the goals pursued with pension reforms. However, policymakers and researchers do need to consider new inequalities in life courses and the meaning of retirement. Also, researchers need to consider how social change may have altered social mechanisms when conducting literature reviews on retirement.

Capturing the diversity of working age life-courses: A European perspective on cohorts born before 1945

“…Moreover, it provides models for estimating what newly emerging life-course patterns could be. Most notably, recent studies pointed to increasing unemployment due to the 2008 recession and the on-going social change in Eastern Europe [53, 65, 66]. In the wake of the 2008 crisis, unemployment rates increased especially among youths, who could not establish themselves in the labor market, and among older individuals, who sometimes responded with early retirement.…”

“…Such life-course patterns are most likely to emerge in Southern and Eastern Europe over the coming years. The reasons are that especially Southern European countries suffered during the 2008 crisis [53], and that Eastern European countries are still transforming as they transition into market economies.…”

“…In their efforts to delay retirement, many governments increased the pensionable age and closed pathways to early retirement [48, 50]. As a result, some older individuals who would otherwise have retired early now remain unemployed or non-employed until they reach the pensionable age [53–55]. Therefore, the younger cohort has more men fluctuating in and out of the labor market during working age (Hypothesis 6).…”

The impact of globalization challenges on pension provision development

“…"However, pension reforms not only affect the way people retire, but also their retirement age. Moreover, the 2008 economic crisis has rebuilt labor markets, which has had an impact on retirement" (Komp, 2017).…”

Crisis, recession and social resilience: A biographical life course analysis

“…Young adults were disproportionately negatively affected through rising rates of unemployment and the growth of precarious forms of work (Aassve et al, 2013;Bell and Blanchflower 2011;Connidis 2014;Crosnoe 2014;Mortimer 2014;Whelan et al 2017), leading to greater difficulties attaining independence. Older Europeans experienced significant losses of net wealth during the crisis, giving rise to financial distress amongst those with low incomes (Cavasso and Weber 2013) and to delayed retirement in some countries (Komp 2017;Meschi et al 2013). A number of studies demonstrated that adults at mid-life experienced comparatively high levels of stress linked to their intergenerational responsibilities (Connidis 2014;McDaniel et al 2013), and where there were high levels of indebtedness (Watson et al 2016).…”