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Transitions From Career Employment Among Public- and Private-Sector Workers

Joseph Quinn (), Kevin Cahill and Michael Giandrea

No 25003, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do the retirement patterns of public-sector workers differ from those in the private sector? Most private-sector workers today face a do-it-yourself retirement income landscape characterized by an exposure to market forces through defined-contribution pension plans and private saving, and the risk of financial insecurity later in life. Public-sector workers, in contrast, are typically covered by defined-benefit pension plans that both encourage retirement at relatively young ages and offer financial security at older ages. As a result, the consequences of private- and public-sector workers’ retirement decisions could differ in important ways. For workers generally, and for private-sector workers in particular, a focus among researchers and policymakers has been the importance of continued work later in life for improving financial security at older ages. Such concerns might be of less consequence for public-sector workers due to the prevalence of defined-benefit pensions. Public-sector workers’ departures from the labor force might also differ from those in the private sector, all else equal, because of the age-specific incentives within their defined-benefit plans. Despite these important differences, the private-public distinction has received relatively little attention in the retirement literature. Our paper examines how private- and public-sector workers transition from career employment to complete labor force withdrawal, with a focus on the role of bridge employment, phased retirement, and re-entry. We identify the prevalence and determinants of each pathway to retirement using longitudinal data on four cohorts of private- and public-sector career older workers from the Health and Retirement Study (HRS). Our findings suggest that the prevalence of work after leaving career employment among public-sector workers resembles that of private-sector workers, although with a higher prevalence of part-time bridge employment, a result that has important implications for public policy as the pace of societal aging accelerates.

JEL-codes: H55 J14 J26 J32 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-age and nep-lma
Note: AG
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Published as Transitions from Career Employment among Public- and Private-Sector Workers , Joseph F. Quinn, Kevin E. Cahill, Michael D. Giandrea. in Incentives and Limitations of Employment Policies on Retirement Transitions , Clark and Newhouse. 2019
Published as Joseph F. Quinn & Kevin E. Cahill & Michael D. Giandrea, 2019. "Transitions from career employment among public- and private-sector workers," Journal of Pension Economics and Finance, vol 18(04), pages 529-548.

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