Who does not Intend to Retire? Mothers'' opportunity costs and compensation at later ages in Europe

Younga Kim, Université catholique de Louvain
Ester Rizzi, Université catholique de Louvain

Research on the association between women’s work-family trajectories and their retirement intentions is still limited. Studies on how different institutional conditions modify the association are even scarcer. Using the first 3 waves of Survey of Health, Ageing and Retirement in Europe, 2004-2009, we apply two-level random effects models with country-level fixed effects to a sample of 50-64 years old mothers. We find that two different mechanisms affect mothers’ retirement intentions: a) strategies to compensate for opportunity costs; b) work attachment. All other things being equal, mothers who interrupted careers and mostly worked part-time intend to work longer than others, indicating the need to compensate for lower lifelong earnings at later ages. Similarly, single, separated, divorced and widowed mothers wish to continue their work. Working continuity during the child-rearing delay retirement intentions, reflecting the work attachment. These results differ across welfare regimes, underlining the importance of family policies and pension benefits.


We examine the effect of mothers’ work histories (working time schedule and continuity of work) and family histories (childbearing and marital status) on retirement intentions. Assessments of the long-term consequences of gendered family life are of paramount importance, especially in light of the ageing process and longer careers. However, relatively few studies have explored this link, especially from a comparative perspective. To fill this gap, we focus on retirement intentions according to the institutional context. We address the following questions: to what extent are the retirement intentions of older mothers explained by their work and family histories, and are these relationships affected by welfare regimes? we use the first three waves of the Survey of Health, Ageing and Retirement in Europe, 2004-2009, and apply two-level random effects models with country-level fixed effects to a sample of mothers aged 50-64 years. Our dependent variable is the intention to retire as early as possible.

Retirement intentions indicate subjective attitudes towards the continuation of paid work. The voluntary part of the retirement decision can be better captured through retirement intentions than through retirement behaviour, which have been ignored in previous studies on the actual timing of retirement.

We found two different mechanisms associated with mothers’ retirement intentions: a) strategies to compensate for opportunity costs and b) work attachment. When all other factors are equal, mothers with a work career characterized by interruptions and part-time work intend to work longer than other mothers, indicating the need to compensate for lower lifelong earnings at older ages. These results change according to the welfare regime. In Mediterranean and conservative countries, mothers who have worked mostly part-time intend to work longer, again indicating a strategy to compensate for opportunity costs. No association between part-time work and retirement intentions was observed in the Netherlands, where the existing basic pension was likely to partially compensate for the lower earnings of part-time work, or in social democratic countries.

Some compensatory strategies are also observed for mothers who are single, separated/divorced or widowed and wish to continue their careers. In social democratic countries, widowed mothers were much less likely to intend to retire than married or cohabiting mothers. These results for Nordic countries can be understood in light of some figures. In Denmark, the percentage of a pension or a survivor pension of the total income of widows aged 65 years and older is one of the lowest in the EU, whereas the survivor pension was abolished in Sweden in 1999. However, in conservative countries, widowed mothers are more likely to retire than married and cohabiting mothers. Widows in conservative countries who have worked part-time are even more likely to intend to retire. In countries with a conservative regime, survivor pensions are relatively high, which may enable widows to work part-time without the need to compensate at older ages.

In other cases, evidence for work attachment mechanisms is found; for instance, working when the youngest child is younger than 6 years old predicts the intention to delay retirement. The mechanisms were significantly observed in post-communist countries. Especially in the Czech Republic, paid maternity and parental leaves were long and were even longer in the 1990s when the mothers of our sample were in their childrearing years. In this context, mothers’ work interruptions were more likely, and mothers who did not interrupt their work when the child was under the age of 6 years were a select group with a stronger work attachment and, consequently, a weaker intentions to retire. The work attachment hypothesis was also supported in conservative countries, where both late parenthood and continuity of work during childrearing years were negatively related to retirement intentions. Recent data from Germany show that having a child between 0 and 2 years of age reduces the employment rate by approximately 20 percentage points relative to mothers with an older child. In the 1990s, discontinuity of work was also common in Belgium or France, which were the two other countries in the conservative group. In these institutional contexts, mothers who are still working at 50-64 years of age may be a select group with a stronger attachment to work and a weaker intention to retire.

In conclusion, due to the ageing populations and to guarantee equilibrium of the pension system, policy makers are interested in increasing people’s years of work. Nevertheless, our analysis of retirement intentions reveals that some groups of mothers need to stay longer in the labour market to compensate for lower earnings. These results emphasize inequalities in opportunities for retirement. The differences in results according to the welfare regime showed that inequality in retirement intentions among mothers might be related to their abilities to balance work and family during their reproductive years. These differences may also depend on pension benefits compensating for the opportunity costs of mothers at older ages.

Presented in Session 1211: Policy Issues