When does a social norm of “early exit” have impact on desired and planned retirement age? Results from the lidA cohort study

Background:

A social norm of “early exit” ('ee') from the labour market is widespread in Germany and affects the individual retirement process.

Research question:

We hypothesise 1) that an ee-norm in the personal environment influences the outcomes desired and planned retirement age, 2) that persons close to retirement are more susceptible to that effect.

Methodology:

We used cross-sectional and longitudinal survey data (wave 2 [W2] in 2014, wave 3 [W3] in 2018) of employed people born in either 1959 or 1965, n = 2.999.

We carried out linear regression with the outcomes desired and planned retirement age, respectively. Step 1: control variables: gender, education, 2: ee-norm W2, 3: ee-norm W3, 3: distance from planned retirement, 4: interaction ee-norm W3Xdistance.

Results:

Both, ee-norm W2 and W3, significantly predicted the desired and planned retirement age. Desired retirement age increased by 2.1 years if participants did not perceive an ee-norm at W2 and W3.

A significant interaction was found for ee-normW3xdistance to desired retirement age, not to planned retirement age. Subsequent analyses stratified by distance from planned retirement showed that ee-norm influenced desired retirement age only in groups with a distance of at least 5 years.

Discussion:

A perceived ee-norm reduces desired and planned retirement age (cross-sectionally and longitudinally). The effects cannot be explained by gender or education.

Susceptibility to ee-norms was not higher among people close to retirement but lower 4 years before planned retirement. This has implications if policy or companies try to prevent early exit among older workers.

Methodological considerations will be discussed.