A discussion of “Working after
Retiring from Career Jobs”
Authors: Robert L Clark, Robert G. Hammond, Melinda
Sandler Morrill, and Aditi Pathak
Discussant: Joanna N. Lahey
Texas A&M and NBER
The Questions
• What are retirement strategies and patterns
for workers in government jobs with DB
pensions and retiree health insurance preretirement?
• What are bridge to retirement paths after
leaving these jobs?
Why important?
• Government Policy
– Benefit design
– Return to work provisions
– Predict supply of experienced workers
• Public Policy more generally
– Effects of benefit design on return to work
– Demand for return to work after benefit payout begins
– Why are people (not) returning to work? (=> change
benefits)
• Economic theory
– Bridging to full retirement for people with DB pensions
– Interactions of plan design with behavior
What they did
• Fielded two surveys with extensive questions
on retirement plan expectations and choices,
work expectations and choices, and
retirement-related questions
– Pre-retirement survey
– Post-retirement survey (point-in-time)
• Merged surveys with administrative data
Findings: Summary statistics
• Preliminary work– results today are summary
statistics and correlations from the two
surveys connected to basic demographics
– Current employees plan to retire relatively young
– Most plan on working (part-time) post-retirement
– Most of those who do not plan on working expect
to have enough money to not need to or expect to
be unable to find work
– The younger the age of expected retirement, the
more likely expectations for post-retirement work
Findings: Expected Retirement
• Regression results conditioning on other variables
(including tenure)
– Men expect to retire later (controlling for profession)
– K-12 Teachers/Admin plan to retire 1 year earlier
– Police/firefighters plan to retire 3 years earlier
– Professors plan to retire .7 years later
Findings: Expected return to work
• Regression results conditioning on other variables
– Later retirement age => lower probability return to
work
– Male => higher probability return to work
– Professional degree => higher pr(return to work)
– Working spouse => higher pr(return to work)
Findings: Survey of recent retirees
• 69% of retirees not currently working (not at
odds with expectations– different group, point
in time vs. the entire future)
• 14.4% working for government
– 8.6% in same place
– 5.8% in new place
• 16.4% working in private sector
• Of those not currently working, 61% unlikely
to return to work
Findings: Recent retirees regressions
• Men: more likely to be working, less likely to be
working in public sector, more likely to plan to
return to work
• Married less likely to work
• < HS less likely to work, > MA less likely to work
• High account balances less likely to work
• TSERS more likely to work for public sector
• People with caregiving responsibilities less likely to
work
Things to be careful of: Selection
• Who takes the surveys compared to
population (standard sampling bias)?:
compare to administrative records
• Who drops out of regressions because of
missing data?: compare on non-missing data
• Who is excluded because of a priori decisions
about work?
– Not a panel-- be careful when comparing one
survey to another
– Especially tricky because of age dimension
More things to be careful about
• Correlations: Conditional vs. unconditional
– Ex. Men are more likely to work, controlling for
police/firefighter occupation
– Ex. People whose spouses have good health are less likely
to work, controlling for caregiving
• Small sample sizes for some populations
– Ex. Men, professional degrees, # children?
• Be clear on details of plan rules
– Is it replacement for Social Security or in addition to? (in
addition)
– TSERS has waiting period, income limits for re-employed
Extensions and new questions
• Future work will show responses merged with
more detailed administrative data
– Basic demographics (gender, DOB)
– Employment history
– Salary information
– Benefit account information
• Additional survey questions not explored here
– Choices made for plans, detailed $, detailed
partner information, risk aversion etc.
Extensions: Benefit design
• TSERS has a lot of different payout options: How
are these related to choices?
– Joint and survivor benefits, different levels
– Age 62 leveling prior to Soc Sec.
– Can change mind if rehired and work for 3 additional
years
• TSERS has defined limits to public re-employment
– 6 month wait before re-employment
– Earnings limitations = max (50% of 12 mo salary, $31380)
Extensions: Retirement Patterns
• Follow the money
– Where does retirement $ come from
– Social Security claiming
– Effect of homeownership
– Financial fragility (2K question)
– Risk aversion
• Follow the work cycle
– How long not working?
– Paths, transitions, # jobs
• Follow the spouse: Joint retirement
Extensions: Retirement Patterns II
• Is this a story about teachers substitute teaching?
– 70-80% of participants are in TSERS
• What specific jobs do re-employed do, in public
and private sectors?
– New careers or related jobs?
• How do different professions behave differently?
– Physical demands?
– Ages of retirement?
– Outside opportunities?
Thank you!