A Job-Characteristics Theory of Retirement

Abstract

This paper argues that certain fundamental job characteristics determine both retirement and pensions accumulated in anticipation of retirement. Data on job characteristics, average retirement ages on different jobs, and pensions are used to test this hypothesis. The results show a statistically significant relationship between job characteristics such as intense physical demands, stress, and repetitive working conditions, and early retirement. The results also show that retirees from jobs with such characteristics have relatively high pensions at early retirement ages, suggesting that their employment contracts anticipated early retirement. Thus, the causal relationship between retirement and pensions may be the opposite to the one normally accepted.