Involuntary Retirement Pathways: The Role of Health, Organizational Pressures,and Mandatory Retirement Policies

“We introduce a novel measurement of involuntary pathways to retirement.”

What is the focus of the paper?

This article explores pathways to involuntary retirement using a comprehensive questionnaire, with representation of approximately half of the Dutch workforce. Five distinct pathways are identified: 1) poor health, 2) organizational pressures, 3) mandatory retirement, 4) a combination of poor health and organizational pressures and 5) a combination of mandatory retirement and organizational pressures. This innovative measurement approach aims to uncover multiple – and sometimes conflicting – pathways that can work against each other. Additionally, it takes a look at factors that influence the pathway, such as education level and opportunities for development in the workplace.

What are the key findings?

The results of the research confirm a common finding in the literature: approximately a quarter of respondents perceive their retirement as involuntary. The most important reason is reaching the mandatory retirement age, cited by one third of the surveyed workers. Organizational pressures and poor health follow as second and third barriers to continuing work after reaching the retirement age. Furthermore, highereducated individuals tend to retire involuntarily most often because of reaching the mandatory retirement age. Employees in organizations offering ample development opportunities or part-time work were less likely to retire involuntarily due to poor health or organizational pressures, but more likely to retire because of reaching the retirement age.

What are the implications?

• A substantial share of the surveyed individuals (25%) reported retiring involuntarily. This has significant implications for retirees’ well-being and is particularly undesirable in the context of an aging population and growing labor shortages.
• Policymakers and organizations can promote a healthier and more voluntary transition into retirement by better managing organizational pressures and to explore more intensively, within the existing possibilities, the options for continuing work after reaching the state pension age.
• Moreover, the findings of this paper encourage the discussion about more flexible arrangements that ease the transition into retirement. Part-time work and/or demotion may contribute to extending working lives.