The Impact of Hours Flexibility
on Career Employment, Bridge Jobs,
and the Timing of Retirement
Kevin E. Cahill
Sloan Center on Aging & Work at Boston College
Michael D. Giandrea
U.S. Bureau of Labor Statistics
Joseph F. Quinn
Boston College, Department of Economics
January 4, 2014
All views expressed in this paper are those of the authors and do not necessarily reflect the views or policies of the U.S. Bureau of Labor Statistics. The
Alfred P. Sloan Foundation supported this research through a grant to the Sloan Center on Aging & Work at Boston College.
Agenda


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Overview
Data and Methods
Prevalence of hours flexibility in career employment
Relationship between hours flexibility and job
transitions
 Relationship between hours flexibility and continued
employment
 Conclusions and limitations
Phased Retirement and the Retirement Process
An illustration of the retirement process
Our Paper

Research Question
 To what extent does hours flexibility in career employment impact the
retirement process?

Motivation
 Can hours flexibility in career employment – phased retirement – extend
work lives?
 Hours flexibility could extend career employment at the expense of
curtailing bridge job employment.
 Or hours flexibility could extend both career employment
and bridge employment.

Key Findings
 Bridge job prevalence is higher among those with access to
hours flexibility in career employment compared to those
without.
 Hours flexibility in career employment is associated with
longer tenure on bridge jobs (not necessarily causal, however).
Background

Older workers in the U.S. by and large express interest in hours
flexibility (AARP, 2013; Center on Aging & Work, 2013)

Employers face barriers to phased retirement (Johnson, 2011)
 Limitations on in-service distributions
 Defined-contribution (DC) plans: cannot take payments before leaving
employer unless age 59 ½ or older
 Defined-benefit (DB) plans: cannot take payments before leaving
employer unless age 62 or older
 => phased retirement is more or less ruled out before age 59 ½ for
those with DC plans and age 62 for those with DB plans
 Anti-discrimination rules
 Tax-qualified benefits are required to be distributed equally across the
employer’s workforce.
 Anti-discrimination rules come into play to the extent that phased
retirement is preferred by higher compensated employees.
 Schedule coordination difficulties could exist as well
Background (continued)
 Employee interest in and employer resistance to hours
flexibility – combined with a flexible labor market –
explains in part why bridge job prevalence (far) exceeds
that of phased retirement in the U.S.
 What if more older Americans had access to phased
retirement on the career job?
Data and Methods
 The Health and Retirement Study

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A nationally-representative longitudinal dataset of older Americans
that began in 1992
Ongoing with new cohorts and biennial follow-up interviews
Cohorts relevant to our study

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HRS Core (51 to 61 in 1992)
War Babies (51 to 56 in 1998)
Early Boomers (51 to 56 in 2004)
 Methodology


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Define Full-Time Career (FTC) job = 1,600+ hours/year AND 10+
years of tenure
Select respondents who were on a wage-and-salary FTC job at the
time of their first interview
Examine respondents’ work histories from 1992 to 2010
Availability and Use of Hours Flexibility in
Career Employment
HRS Respondents with a Wage-and-Salary Full-Time Career Job at the Time of the
First Interviewa
Bridge Job Prevalence
by Gender and Hours Flexibility Status
Percent
HRS Core Respondents with a Wage-and-Salary Full-Time Career Job at the Time
of the First Interview
Note: Bridge job prevalence percentages do not include individuals who were out of work for two or more waves following career
employment and later reentered. Percentages also do not include individuals who were self employed on their career job.
Part-Time Status of Bridge Jobs
by Gender and Hours Flexibility Status
Percentage working part-time in bridge employment
HRS Core Respondents with a Wage-and-Salary Full-Time Career Job at the Time
of the First Interview
Brief Summary

Compared to those with hours flexibility in career employment,
individuals without hours flexibility are:
 more likely to exit the labor force directly from career employment; and
 more likely to continue working full time if they do transition to a bridge
job.

Results could mean different things
 A true causal effect
 The lack of hours flexibility in career employment leads to direct exits
and more abrupt transitions out of the labor force (e.g., “burn out”).
 A selection effect
 Individuals who plan on an abrupt exit from the labor force self-select
into employers that do not offer hours flexibility.
 No true net effect on hours worked at all
 Those who reduce hours in career employment may be more likely to
work in bridge jobs simply because they need to continue working
later in life to make up for lost hours in career employment.
Tenure in Career and Bridge Employment
by Gender, HRS Cohort, and Hours Flexibility Status
HRS Core Respondents with a Wage-and-Salary Full-Time Career Job at the Time
of the First Interviewa
Correlates of Tenure in Career Employment
HRS Core Respondents with a Wage-and-Salary Full-Time Career Job at the Time
of the First Interview
*: Excluding HRS Core men.
Correlates of Tenure in Bridge Employment
HRS Core Respondents with a Wage-and-Salary Full-Time Career Job at the Time
of the First Interview
Multivariate Analysis of Years in Career and Bridge
Employment, by Gender
HRS Core Respondents with a Wage-and-Salary Full-Time Career Job at the Time
of the First Interview
Men
Women
Conclusions
 The low prevalence of phased retirement in the US – and the
high prevalence of bridge employment – is in part the product of
employees’ preferences for hours flexibility, employers’
(justifiable) resistance to offering such arrangements, and a
flexible labor market.
 In our sample of older Americans with wage-and-salary career
jobs, approximately one quarter could reduce the number of
hours of paid work.
 Those without hours flexibility are the least likely to transition
to bridge employment (but bridge job prevalence among this
group is still notably high (45%+)).
 Hours flexibility is associated with longer tenures in career
employment – with the notable exception of the male HRS Core
respondents – and with longer tenures in bridge employment.
Conclusions (continued)
 A continuation of sluggish growth and elevated unemployment
rates (=> increased difficulty finding bridge employment) and a
relaxing of regulatory barriers to phased retirement could shift
the relative importance of bridge jobs and phased retirement in
the years ahead.
 Preliminary evidence suggests that such a shift could further
promote gradual exits from the labor force.
Limitations
 The results are associations; self selection could be a critical
driver of the results.
 Macroeconomic conditions will likely impact the extent to which
these findings apply to the Early Boomers and future cohorts of
older Americans.
Appendix
Bridge Job Prevalence
by Gender and Hours Flexibility Status
Percent
HRS War Baby Respondents with a Wage-and-Salary Full-Time Career Job at the
Time of the First Interview
Note: Bridge job prevalence percentages do not include individuals who were out of work for two or more waves following career
employment and later reentered. Percentages also do not include individuals who were self employed on their career job.
The Macroeconomic Environment Faced by
Different Cohorts of Older Americans
The Dow Jones Industrial Average, 1992 – 2012 and Three Cohorts of HRS
Respondents, Denoted by Their First Six Years of Survey Participation
The Macroeconomic Environment Faced by
Different Cohorts of Older Americans
Unemployment Rate of the Population 55 Years and Over, 1992 – 2012 and Three
Cohorts of HRS Respondents, Denoted by Their First Six Years of Survey Participation