Educational Inequalities in Labor Market Exit of Older Workers in 15 European Countries

Abstract

Abstract This article examines country differences in the association between education and voluntary or involuntary labor market exit and whether these country differences map onto institutional characteristics of the countries. Work exit is defined as involuntary or voluntary based on the reasons of exit. Four different types of institutional factors, push and pull, aiming for an earlier work exit and need and maintain factors to retain older workers in employment are considered. Using data from 15 European countries from the longitudinal Survey of Health, Aging and Retirement in Europe (SHARE), discrete-time event history models with a categorical outcome are estimated for each country separately. In a second step, we add macro-level indicators and conduct meta-analyses to analyze country differences. Results show that in almost all countries a social gradient in involuntary work exit exists but not in voluntary exit. Lower-educated workers are more likely to involuntarily exit the labor market. Institutional factors, especially those supporting older workers’ retention in employment, are associated with a smaller social gradient in work exit. Our findings suggest that investments in active labor market expenditures, especially in lifelong learning and rehabilitation for lower educated workers, may help to reduce the social gradient in involuntary work exit.