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Part-Time Work and Retirement

Paper Session

Sunday, Jan. 8, 2017 1:00 PM – 3:00 PM

Sheraton Grand Chicago, Colorado
Hosted By: Society of Government Economists
  • Chair: Brian W. Sloboda, University of Maryland University College

The Pay and Requirements of Part-time Work: What can we learn from establishment surveys?

Kristen Monaco
,
U.S. Bureau of Labor Statistics
Nicole Dangermond
,
U.S. Bureau of Labor Statistics
Kristin Smyth
,
U.S. Bureau of Labor Statistics

Abstract

There is a great deal of literature surrounding the wage gap between full-time and part-time jobs. Generally, studies control for potential differences in the type of work performed either by using occupational controls (typically dummy variables), controls for individual attributes (education, experience, etc.), or both. None of these appropriately control for the actual job tasks and working conditions, mainly due to lack of data availability.

The Bureau of Labor Statistics has two surveys of businesses that obtain information on the type of work being done on the job – the National Compensation Survey and the Occupational Requirements Survey. We use these two surveys to examine the types of work performed part-time, the changing nature of part-time work, and how work requirements differ between part-time and fill-time jobs.

Part-Time Employment and Firm-Level Labor Demand over the Business Cycle

Lawrence Warren
,
U.S. Census Bureau

Abstract

Part-time employment for economic reasons (PTE) is countercyclical, volatile, and transitory. Workers in PTE are nearly three times more likely than the unemployed to return to full-time work in a given month, and seven times more likely than full-time workers to become unemployed. Using household survey data, I demonstrate that cyclical fluctuations in PTE come from changes in the transition rates between full-time and part-time employment rather than between part-time and unemployment. Moreover, these movements are primarily due to within-job changes in hours. Accordingly, I model part-time work focusing on a firm's decision to hire, fire, or partially utilize its labor force. Firms in the model are heterogeneous in size and productivity, and are subject to search frictions. The model produces firm-level utilization of part-time employment which is consistent with observed worker flows, and varies across the size and age distributions of firms. Over the business cycle, the model matches the observed relative volatility of unemployment and PTE. Part-time labor utilization by firms increases the volatility of vacancies and unemployment in the model relative to the case with only an extensive margin.

What Determines Gradual Retirement? Differences in the Path to Retirement between Low- and High-Educated Older Workers

Nadia Karamcheva
,
Congressional Budget Office
Richard Johnson
,
Urban Institute

Abstract

Although labor supply at older ages surged over the past two decades, many unanswered questions remain about why there is so much heterogeneity in workers’ retirement paths and what factors are associated with longer working lives. This paper uses data from the Health and Retirement Study, including restricted-access occupational codes matched with job demands information derived from the Occupational Information Network (O*NET), to study the determinants of labor force transitions of workers on their path to retirement. Our results show that there are significant differences in the retirement transition paths of older workers with different levels of education. Less-educated workers tend to fully leave the labor force earlier than their more-educated counterparts and are less likely to experience spells of partial or phased retirement. Moreover, regardless of education, workers who incorporate periods of phased/partial retirement on their way to full retirement tend to extend their working lives, as compared with workers who hold only full-time jobs or work continuously. Among the strongest determinants of older workers’ propensity to transition from fulltime to non-work are poor health, low wealth or income, and current job characteristics such as: pressure to retire, age discrimination, stress, not enjoying going to work, inability to move to a less demanding work or to reduce hours with current employer, difficult working conditions, as well as having a production/manual occupation. In contrast, workers whose employers allow flexible schedules, or who have professional, service or sales occupations are most likely to transition into phased or partial retirement and extend their working lives. Our results suggest that the concentration of jobs with poor work environment, inflexible hours, high physical demands and bad working conditions among less-educated older workers, might be contributing to the low incidence of phased or partial retirement among those workers.

Parental Retirement Timing: The Role of Unanticipated Events in the Lives of Adult Children

Marina Kutyavina
,
Congressional Budget Office
Christopher Tamborini
,
U.S. Social Security Administration
Gayle Reznik
,
U.S. Social Security Administration

Abstract

Although anecdotal evidence of older parents postponing retirement to financially support their grown children is common, the empirical evidence is scarce. In this paper, we use data from 1992-2010 waves of Health and Retirement Study to identify a broad set of pivotal events in the lives of adult children, including marriage or divorce, loss or gain of employment, and moving in or out of the parental home. First, we study which of these events shift parental retirement expectations. Next, we quantify the causal impact of unexpected events on retirement realizations, moving beyond the correlational analyses in prior literature. Contrary to anecdotal evidence, we do not find that children’s events cause a delay in retirement. Moreover, our results indicate that a child’s move out of parental home has the opposite effect, significantly reducing both the expectations of working after age 65 as well as the realized rates of full-time work past 65. We investigate the financial mechanism for this effect and find that parents provide lower financial support after having a child move out, thus enabling earlier retirement. The magnitude of the effect from having a child move out is equivalent to the effect of an own health shock experienced during the pre-retirement years.
 
Discussant(s)
Etienne Lale
,
University of Bristol
Katie Lim
,
U.S. Treasury Department
Kevin E. Cahill
,
Boston College
Jonathan Schwabish
,
Urban Institute
JEL Classifications
  • J0 - General