The decision to retire early: Evidence from private service sector in Thailand

Abstract

Using worker survey data from the Foundation of Thai Gerontology Research and Development Institute, this paper analyzes the factors that lead to the decision to take early retirement of workers in the private service sector in Thailand. The private service sector is here limited to the wholesale, retail, hotel, and restaurant industries. The analysis is restricted to individuals aged above 45 years at the time of the survey. The data set includes information gathered from 611 individuals. This study applies Beehr's (1986) framework, which identifies the extension of working decisions by individual characteristics and working environment. Using the logistic regression model, it was found that individuals who work in retail have an approximately 9% higher propensity to delay their plan to retire early than those in other industries. The results also indicate that individuals with debt have an approximately 8% higher propensity to retire early than those without. In addition, it was found that those who can avail of financial transfers from their families have a higher propensity to delay their early retirement than those who cannot. This may imply that older workers may not want to be a financial burden on their family. Regarding other sources of financing after retirement, only the availability of a social security plan shows a positive- although insignificant-impact on the decision to retire early. Also, those with a positive attitude toward older workers in the workplace-for example, regarding their ability to adapt to a new work environment-have a higher propensity to retire early. These findings call into question the belief that family altruism and a positive attitude toward older workers in the workplace are essential factors in individual decision-making regarding retirement.