Does Age-Related Decline in Ability
Correspond with Retirement Age?
Anek Belbase and Geoffrey T. Sanzenbacher
Center for Retirement Research at Boston College
17th Annual Meeting of the Retirement Research Consortium
Washington, DC
August 6, 2015
Introduction
• Are some occupations more vulnerable to age-related decline
in ability than others?
o Often assumed to be “blue-collar” occupations.
o But this may be too simple – many white-collar
occupations use abilities known to decline early.
• This project constructs a “Susceptibility Index,” a continuum
identifying occupations reliant on abilities that decline early.
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Age-related decline and occupation
• Different systems of the body decline at different rates with
age.
o But some blue-collar occupations can rely on abilities that
are preserved (e.g. static strength and crystalized
intelligence).
o And some white-collar occupations can rely on abilities
that decline (e.g. problem solving, memory, and response
speed).
• Broad categories can ignore important variation in the ability to
do certain jobs with age.
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Hypotheses
• Workers in occupations that rely heavily on abilities
susceptible to age-related decline will be more likely to retire
early.
o This trend will be true regardless of the occupation’s
classification as blue or white collar.
• Using the Index will provide researchers and policymakers
insight on non-blue-collar occupations where working longer is
difficult.
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Constructing the Index
Step 1: Identify abilities used in occupations
• The project relies on O*Net data, which surveys job-holders,
analysts, and experts to measure the importance of abilities in
jobs.
• O*Net provides data on 51 physical, cognitive, and sensory
abilities for over 900 occupations.
• Each ability is rated on an importance scale from 0 (not
important) to 5 (very important).
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Step 2: Identifying which abilities decline
• The project relies on literature from gerontology, psychology,
medicine, and occupational studies.
• Abilities assumed to decline early were those identified in the
literature to decline significantly by mid-60s, except:
o Abilities that could be corrected through devices (e.g.,
eyesight); and
o Abilities that were likely to be maintained through work
(e.g., stamina).
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Example: Assignment of physical abilities
Ability
Physical strength abilities
Static strength
Shows early decline
No
Explosive strength
Yes
Dynamic strength
Yes
Trunk strength
No
Endurance
Stamina
No
Flexibility, balance, and coordination
Extent flexibility
Yes
Dynamic flexibility
Yes
Gross Body coordination
Yes
Gross body equilibrium
Yes
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Step 3: Calculating the Index
• The numerator is the summed importance (measured on a scale
from 0-5) of all the abilities that decline.
• The denominator is the summed importance of every ability
that the occupation uses.
• The Index represents the share of abilities that decline early,
weighted by their importance.
o For interpretation, the Index is converted to a percentile
rank.
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Blue collar occupations have high Index
values…but so do some white collar jobs.
Susceptibility Index percentile
100%
80%
White collar
Blue collar
60%
40%
20%
0%
Source: Authors’ calculations from the O*Net and authors’ review of literature.
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White collar occupations with high Index
values have earlier retirements.
Share Retiring Before 65
White-Collar Occupations with 30 or More Workers
1.0
0.8
0.6
0.4
0.2
0%
20%
40%
60%
80%
100%
Susceptibility Index percentile
Source: Authors’ calculations from the Health and Retirement Study 1992-2012 waves and O*Net.
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Using the Index: a model of early retirement
• The sample consists of all individuals in the Health and
Retirement Study (HRS) working at the interview closest to
their 58th birthday.
• The dependent variable is either: 1) retirement before 62,
2) retirement before 65, or 3) retirement before 67.
o Individuals who don’t reach the indicated age prior to the
end of the HRS are excluded from the sample.
o A total of 5,058 individuals are included.
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Using the Index: a model of early retirement
(cont’d)
• Independent variables include:
o The Susceptibility Index percentile for the individual’s age
58 occupation;
o Demographic characteristics like race, education, and
gender;
o “Shock” variables like changes in health, the loss of the
age-58 job, or a spouse’s retirement.
o
Positive coefficients on the independent variable mean
individuals with the indicated characteristic were more likely
to retire early.
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The HRS sample and the Susceptibility Index
Bottom 50% of Index
(least susceptible)
Retired by 65
64.9%
Retired by 67
80.3
Female
60.8
High school graduate
34.2
College graduate
58.6
Black
10.7
Hispanic
4.6
Married
77.4
Current earnings
$49,752
Observations
2,511
Variable
Top 50% of Index
(most susceptible)
70.4%
85.4
40.4
44.2
22.7
21.0
10.8
75.4
$35,019
2,547
Source: Authors’ calculations from the Health and Retirement Study 1992-2012 waves.
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Even controlling for other factors, the Index
has a significant effect on retirement timing.
Marginal Effect of Susceptibility Index Decile on Early Retirement
1.5%
No controls
Full controls
1.2%
1.1%
1.0%
1.0%
0.9%
0.5%
0.0% 0.1%
0.0%
Retirement by 62
Retirement by 65
Retirement by 67
Note: Solid bars are significant to the 5-percent level.
Source: Authors’ calculations from the Health and Retirement Survey 1992-2012 waves.
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More on regression results
•
A worker in the 90th percentile of the Index is 8 percentage
points more likely to retire by 65 than one in the 10th
percentile.
•
When a dummy variable indicating blue-collar status for the
occupation is included in the regression it is insignificant.
o The blue-collar versus white-collar distinction does not
provide information beyond that provided by the Index.
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Policy implications
• Workers in age-susceptible occupations retire earlier than
workers in less susceptible occupations.
o Includes a variety of white-collar occupations.
o Some blue collar occupations are worse than others.
• As the full-retirement age increases, policymakers should be
aware of occupations susceptible to age-related decline.
o This awareness may require looking beyond traditional
occupational metrics.
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