Firms, managers and retirement bunching: A comparison of Australia and the Netherlands

Reducing barriers towards old-age employment is an important part of the global effort to counter the adverse effects of population ageing. Many countries are introducing policies encouraging workers to delay retirement and remain employed longer (examples include raising the pension age and scaling back early retirement pathways). And while these initiatives are generally considered beneficial, their effectiveness is often put in question. Indeed, many stakeholders wonder whether we can devise better policies that would lead to more substantive retention of older workers. However, improving upon the established policies typically involves effectively targeted interventions, and effective targeting requires a thorough understanding of the factors that shape individuals’ retirement timing. Factors such as workers’ own circumstances, including financial incentives, income security, family composition and health constraints, attributes of the firm (productivity, solvency, corporate culture, managerial discretion, sectoral standards, etc.), and broader societal norms may all influence retirement timing. And while we have a large body of evidence that documents the impacts of worker’s circumstances, the influence of the latter factors remains largely unexplored.

In this project, we plan to focus on firm-specific factors influencing retirement timing and the mechanisms through which they operate. We will answer the following three questions:

1. How much do individual retirement decisions depend on observable and unobservable attributes of the firm;
2. are these attributes (and their influences) country-specific; and
3. can these attributes (and their influences) explain clear differences in retirement behaviors across countries.