Continuous Discontinuity? Employment Stability in the Last Occupation and Paid Work Beyond the Legal Retirement Age Limit in Germany

Andreas Mergenthaler, Federal Institute for Population Research

Background: Employment rates of older adults have increased in Germany, particularly in retirement. Employment beyond the legal retirement age limit is influenced by individual resources and abilities, as well as occupational, institutional and biographical factors. The study focuses on the association of labor market participation after reaching the legal retirement age limit with the stability of the last occupation before entering retirement. It is suspected that paid work beyond the legal retirement age limit is more likely if employment stability in the last occupation was low. This is referred to as the proposition of "continuous discontinuity".

Data source and sample: The survey "Transitions and Old Age Potential" (TOP) with a total of 5,002 persons of the German-speaking population aged 55 to 70 in 2013 was used. The analytic subsample of TOP was narrowed to persons between 65 and 70 years (birth cohorts 1943 to 1948), who were employed in the last occupation prior to the start of retirement pensions and who received an age pension from their own employment (N = 1,110).

Results: The results of the conditional binary logistic regression models show an inverse relationship between the duration of employment at the last employer before retirement and in retirement. The correlation remains relatively stable over all models (AME = -0.004, p ≤ 0.01) taking into account all confounding characteristics (e.g. socio-demographic factors, socio-economic resources or occupational conditions of the last job).

Conclusion: The duration of employment before retirement is negatively associated with paid work in retirement between 65 and 70 years. Paid work beyond the legal retirement age limit in Germany can thus be interpreted as the continuation of discontinuous careers. Therefore, the findings point to the importance of the stability of the former employment career for the explanation of paid work in retirement.


Presented in Session 1143: Economics, Human Capital, and Labour Markets