Why Some Retire, Others Persevere

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When older workers are weighing whether to retire or carry on for a few more years, it’s unsurprising that the characteristics of their jobs are a big consideration:

  • Higher pay keeps workers in the labor force longer.
  • Workers who feel discriminated against are often the first to retire.

But personality also matters, says a team of researchers from the University of Southern California (USC) and the RAND Corporation who analyzed data from the Health and Retirement Study, an on-going survey of age 50-plus U.S. households.

Consider two types of personalities – highly active and engaged, and passive and reserved.  The researchers found that higher wages are effective in persuading more passive people to continue working.  But monetary rewards are, for highly active workers “a less important driving factor for the decision to remain in full-time employment,” said Marco Angrisani, one of the study’s co-authors from USC’s Center for Economic and Social Research.  Active workers will continue to work, simply because they like it or feel compelled to keep busy.

And this effect is large, the researchers said. For average passive workers to have the same probability of remaining in full-time employment as their active counterparts, they would need to be paid $7 more per hour.

Next, take discrimination in the workplace. Previous research had shown that older workers who feel discriminated against tend to throw in the towel and retire earlier.  But the new study found this is mainly true for people who are not “conscientious”– those who lack a strong work ethic or an ability to delay gratification.

Conscientious workers are much less sensitive to perceived discrimination and more likely to remain in their jobs.

The researchers conclude that personality is central to decisions about retirement.  It can be the glue that keeps workers on the job or a factor that allows job characteristics to have a much greater effect on when workers exit the labor force.

Full disclosure:  The research cited in this post was funded by a grant from the U.S. Social Security Administration (SSA) through the Retirement Research Consortium, which also funds this blog.  The opinions and conclusions expressed are solely those of the blog’s author and do not represent the opinions or policy of SSA or any agency of the federal government.

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3 comments
David Reed

These summarised comments are interesting:- "older workers who feel discriminated against tend to throw in the towel and retire earlier.....mainly true for people who are not conscientious - or an ability to delay gratification."From an earlier perspective then, could Mischel's childhood 'marshmallow test' (delayed gratification) not only be a potential predictor of adult success, but potential retirement timing?Thanks for these articles. Cheers.

Paul Brustowicz

I agree about personality being central to making a decision about retirement. In my case, it was the personality of the new and younger manager that convinced me to retire sooner rather than later. I have had younger managers previously without any problems. This one treated me like a kid without any experience. I knew it was time to bail out.

David Miller

My partner retired last year after 35 years in the civil service. For her, retirement was something she had planned for over a long period. When the day came, she wiped her hard drive, unplugged her computer, and walked out and has never, ever looked back or thought about her work life again.On the other hand I can't just walk away from my work as a freelancer. For me, retirement has no real meaning. Very strange how different our attitudes are.