Expectations of older workers regarding their exit from the labour market and its realization

Abstract

Abstract The objective of the paper is to analyse the labour market behaviour of older workers, specifically cross-country differences in expectations regarding the exit from the labour market and subsequent realization. Using longitudinal Survey of Health, Ageing and Retirement in Europe (SHARE) data and econometric analysis, we provide an international comparison of the situation of older workers in the Czech Republic with the other countries of Europe. The data show that although expectations about work activity at the age of 63 are quite similar in the Czech Republic from an international perspective, the work activity realized differs significantly between the Czech Republic and other countries. Our principal finding is that the Czech Republic has a high rate of unexpected retirements compared to all other European countries included in this analysis, even if we control for the socioeconomic background of respondents. The econometric analyses further show that up to about one-third of this difference can be explained by the lower retirement age set by the institutional environment in the Czech Republic, which is anticipated by employees at preretirement age. Conversely, the health status of older workers, and even the different allocation of employees to physically demanding occupations, does not have a significant impact on these cross-country differences in unexpected retirements.