The Process of Participation and Phased Retirement: Evidence from Mature-Aged Workers in Australia

1. The Process of Participation and Phased Retirement: Evidence from Mature-Aged Workers in Australia Jacqueline M. Drew & Michael E. Drew School of Economics and Finance Faculty of Business Queensland University of Technology m.drew@qut.edu.au Thursday, 17th May, 2007 Productive Ageing Forum

2. 1. Aims of the Study • The current study examines the participation and phased retirement decisions of mature-aged workers in the Australian labour market. Despite increasing interest in understanding the factors involved in the decision of mature-aged workers (defined in this study as workers 50+ years of age) to participate or withdraw from the labour market, a number of key questions remain unanswered. • The specific aims of the current study are captured within the following three research questions: • To identify how to increase the participation of mature-aged workers in the labour market; • To identify barriers to participation; and, • To identify the costs and benefits, price and non-price, to engaging mature-aged workers from the perspective of the employee (supply-side) and employer (demand-side).

3. SEM 1: Participation • Pre-retire income • Source of current income • Pre-retire income satisfaction • Pre-retire economic well-being • Planning for retirement • Organisational programs • Stereotypes of older workers • Organisational commitment • Job satisfaction • Work centrality • Attitudes towards retirement • Pre-retire health status 1. Multiple Group SEM of Participation (Not-retired/retired) Economic Psychological Male/Female Age cohorts

4. SEM 2: Phased Retirement • Voluntariness of retirement • Post-retire. econ. well-being • Pre-retirement prep. outcomes • Spousal relationships • Retirement concerns • Satisfaction with retirement • Retirement Adjustment • Post-retirement health status Economic 2. SEM of Phased Retirement (Retired only) Psychological Male/Female The SEMs are estimated with EQS Version 6.1, using maximum likelihood as the estimation method. Age cohorts

5. 4. Methodology • The current study involved two key phases of data collection. • Data was collected from a large sample of individual respondents, with a target population of individuals aged between 50 and 65 years of age • 3,000 surveyed, response rate 31% • The second phase involved a sample of government and non-government organisations operating on a state, national and international basis • 60 surveyed, response rate 68%

6. 17 Key Findings • Inverse relationship between economic well-being and participation • Participation, policy distortions and the replacement ratio • Job search strategies and participation • Consumer preferences, participation and psychology • The positive relationship between stereotypes and participation • The positive relationship between organisational programs and participation • Targeted strategies for female mature-aged workers and participation • The barrier of economic status

7. Emphasis on financial planning for retirement as a barrier • Stereotypes and the barrier of perception • Employment type barriers to phased retirement • Recruitment barriers for mature-aged workers • Organisational benefit of implementing mature-aged worker programs • Program costing and administration • Managing higher employment costs of mature-aged workers • Individual economic well-being as a benefit • Individual benefits related to psychological well-being

8. Not Retired Beta Weight/ Not Retired Beta Weight/ Retired Beta Weights Retired Beta Weights Pre Pre - - Retirement Health Retirement Health Status Status 0.06*/0.09* 0.06*/0.09* More positive stereotypes are predictive More positive stereotypes are predictive of more positive attitudes to retirement (retired of more positive attitudes to retirement (retired grp grp only) only) 0.02/0.17* 0.02/0.17* Stereotypes of Older Stereotypes of Older Workers Workers Plans for Retirement Plans for Retirement Attitudes to Retirement Attitudes to Retirement 0.17*/0.17* 0.17*/0.17* More positive stereotypes are predictive More positive stereotypes are predictive of more positive org attitudes of more positive org attitudes 0.15*/0.13* 0.15*/0.13* More positive org attitudes are More positive org attitudes are predictive of less positive predictive of less positive 0.20*/0.18* 0.20*/0.18* attitudes to retirement attitudes to retirement Org Programs for Older Org Programs for Older Workers Workers Greater availability of org Greater availability of org - - 0.07*/ 0.07*/ - - 0.08* 0.08* Programs Progarms is predictive of more is predictive of more Personal Personal Positive personal org attitudes Positive personal org attitudes Organisational Organisational Attitudes Attitudes 0.77*/0.78* 0.77*/0.78* - - 0.36*/ 0.36*/ - - 0.34* 0.34* Greater concerns with economic Greater concerns with economic Organisational Organisational well well - - being is predictive of less positive being is predictive of less positive Commitment Commitment 0.73*/0.71* 0.73*/0.71* attitudes to retirement attitudes to retirement 0.78*/0.74* 0.78*/0.74* Job Job Pre Pre - - Retirement Retirement Satisfaction Satisfaction Economic Economic Well Well - - Being Being Work Work Centrality Centrality Multiple Group Model of Mature-aged Worker Participation for the Not Retired/Retired Group – Final Model

9. 0.06 0.06 Pre Pre - - Retirement Health Retirement Health 0.75* 0.75* Spousal Spousal Status Status Relationships Relationships Post Post - - Retirement Health Retirement Health Status Status 0.08 0.08 - - 0.06 0.06 0.17* 0.17* 0.00 0.00 0.11* 0.11* 0.29* 0.29* 0.10 0.10 Plans for Retirement Plans for Retirement Stereotypes of Older Stereotypes of Older Workers Workers 0.18* 0.18* 0.14* 0.14* Retirement Retirement Post Post - - Retirement Retirement Adjustment Adjustment Economic Economic 0.19* 0.19* - - 0.04 0.04 Well Well - - Being Being Voluntariness of Voluntariness of Retirement Retirement 0.05 0.05 Org Programs for Older Org Programs for Older - - 0.24* 0.24* Workers Workers 0.90* 0.90* - - 0.28* 0.28* 0.42* 0.42* - - 0.30* 0.30* 0.68* 0.68* 0.18* 0.18* 0.82* 0.82* Personal Personal Pre Pre - - Retirement Retirement 0.78* 0.78* Organisational Organisational Organisational Organisational Satisfaction with Satisfaction with Prep. Outcomes Prep. Outcomes Attitudes Attitudes Commitment Commitment Attitudes to Retirement Attitudes to Retirement Retirement Retirement 0.69* 0.69* - - 0.25* 0.25* 0.79* 0.79* Retirement Retirement Job Job 0.73* 0.73* Concerns Concerns - - 0.21* 0.21* Satisfaction Satisfaction Pre Pre - - Retirement Retirement Economic Economic Well Well - - Being Being Work Work Centrality Centrality Full Model of the Phased Retirement Process for the Retired Group – Final Model

10. Acknowledgements • This study was made possible by the financial support from the National Seniors Productive Ageing Centre (NSPAC) and the Queensland University of Technology (QUT). The contribution of the Australian Government, Department of Health and Ageing (DHA) is also gratefully acknowledged. • We thank Peter Cassematis (Griffith University, GU) and Robert Bianchi (QUT) for invaluable research assistance throughout the project and Dr Stephen Cox (QUT) for technical advice. • We acknowledge the contribution of members of the Project Steering Committee (and NSPAC Research Advisory Committee members), David Deans and Lyn Moorfoot (National Seniors, NS), members of the NSPAC Research Advisory Committee, Professor Margaret Steinberg AM (Chair) (QUT), Kevin Vassarotti (DHA) and Don Maconachie (University of the Sunshine Coast, USC). The research has also benefited from discussions with Professor Philip Taylor (University of Cambridge) and Professor Allan Layton (QUT). • We thank Juanita Mottram and colleagues (NS) for assistance in the collation of the survey responses and the team of fifteen data entry assistants (honours and doctoral students) from the School of Economics and Finance (QUT) for their efforts. • Finally, and most importantly, we thank those individuals (members of the NS) and organisations throughout Australia that generously gave of their time to participate in the study. • The opinions expressed are those of the authors and are not necessarily held by the DHA, GU, NS, NSPAC, QUT or USC. Any remaining errors are also the authors’ responsibility. Drew, Jacqueline M., and Michael E. Drew, 2005, The Process of Participation and Phased Retirement: Evidence from Mature Aged Workers in Australia, Brisbane: Post Pressed, [ISBN 1-876682-86-8]. www.postpressed.com.au