Influence of Childhood Circumstances on the Length of Working Life

Christian Dudel, Max-Planck-Institute for Demographic Research
Jo Mhairi Hale, Max Planck Institute for Demographic Research
Angelo Lorenti, Max Planck Institute for Demographic Research

The increasing number of retirees and declining contributions to pension systems are matter of concerns for the sustainability of pension systems. Working at older ages is one of the most widespread solutions to extend working lives. However, working later in life is possible only if an individual is in good health and possesses skills requested to effectively perform his or her job. Both health and education accumulate during life starting from very young ages. We assess how childhood circumstances affect individual working trajectories. Applying multistate period life tables to data from the Health and Retirement Study (HRS) for the period 1992-2011, we provide estimates of the length of working life, age at first labor market exit, number of years expected in inactivity and disability, by number of childhood adversities. Our findings indicate that as the number of childhood adversities increases the expected number of years in employment at age 50 decreases. Adult males aged 50 raised in better childhood circumstances are expected to work one year longer than their disadvantaged peers. For the female counterparts the gap is bigger, 2 years. The expected number of years of disability increases with the number of childhood adversities. Adult males that grew up in adverse conditions are expected to live disabled almost 4 years of the remaining life expectancy at age 50 while their advantaged counterpart roughly 3 years. This gap is bigger in the case of females, 5 and 3 years disabled, respectively.

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