INFLUENCES IN THE TIMEING OF RETIREMENT: AGE NORMS, PERCEPTION OF AGE AND LIFE COURSE EVENTS (I)
by Peterson B. Zhou
In contemporary social gerontological research, an early retirement trend in the United States over the past century has been discussed and defined as one prominent social phenomenon. Research findings show that there is a gradual tendency for older workers to leave the labor force before 65, the traditional age for retirement. As Figure 1 shows, the trend of the U.S. civilian older workers in the labor force has dramatically declined since 1960's.
The decline in age at retirement was greatest in the 1970's and has been modest since 1985 (Kohli, 1994). The trend toward early retirement has accelerated in recent years (Atchley, 1991). Even among those 60?61?year?old men who were ineligible for Social Security benefits, the labor force participation rate declined from 83% to 67% between 1970 and 1993 (Quadagno and Quinn, 1996).
On the other hand, human life expectancy has been increasing since the beginning of the Twentieth Century. As Figure 2 shows that U.S. average life expectancy at age 65 was only 11.9 years in 1900, and is projected to reach 19.3 years in 2040. The rise in life expectancy and the 76 million Baby boomers has resulted in a dramatic increase in numbers of older Americans.
The phenomenon of the "graying of America" has aroused national attention among social scientists, politicians and legislators. Demographers estimate that by the year 2000, more than 36 million Americans will be older than 65. The number of older Americans has been projected to reach 65.6 million in 2030, and reach 80 million in 2050 (Cockerham, 1991), when the elderly are expected to comprise 21.8 percent of the total U.S. population.
Since the total U.S. population and workforce have been growing slowly in the last decade of the Twentieth Century, and the pool of younger workers with requisite skills will shrink, older workers are needed in the labor force to sustain the national economy. Furthermore, economic demographers have projected within the next few decades an age profile that implies a labor shortage if current early retirement patterns and trends are allowed to continue (Sheppard, 1988). According to Sheppard (1996), the shortage of qualified older workers may not be satisfactorily met through immigration and by accelerating labor force participation by women under age 55.
Moreover, under pressure from the near?bankruptcy of the trust fund, the U.S. Congress found it necessary to raise the official retirement age for full Social Security benefits. The policy was changed to encourage later retirement. In 1983, an amendment to the Social Security Act was passed. The 1983 Amendment raised the minimum retirement age for the receipt of full Social Security benefits from age 65 to 67 for persons born in 1960 or thereafter (Cockerham, 1991). The 1983 Amendment also increased the penalty for early retirement at age 62 (Quadagno and Hardy, 1996).
As the government provides disincentives for early retirement, employer pension plans are providing incentives for early retirement. These early retirement incentives may be accompanied by workforce reduction strategies that target older workers as a segment of the workforce that may agree to withdraw from the workforce because they fear loss of pension benefits if their companies are downsized (Hanks, 1990). As reported by Quadano and Hardy (1996), employers' early retirement benefits stabilize retirement income by providing men and women who retire before they are eligible for Social Security benefits with a level of income equal to what they will receive when they reach eligibility age. It is viewed that while the government has increasingly moved toward efforts to encourage later retirement, employer pension plans have drawn older workers out of the labor force at earlier ages (Quadagno and Hardy, 1996).
Research has shown that increasing numbers of older workers have been choosing to retire before age 65 (Foner, 1978, 1981; Schwab, 1981) regardless of the late retirement incentives of government policies in the 1980's and penalties for early retirement (Foner, 1983). The early retirement trend remained almost unchanged from 1982 to 1991. In an early study, Foner and Schwab (1981) reported that almost two?thirds of retired employees in their sample left the workforce before age 65, and the median age of retirement was 60.6 years. In a more recent study on retirement planning among midlife university employees, Turner et al. (1994) reported that the average age of planned retirement was 62, eight years earlier than the federal mandatory retirement age. In the same study in 1994, one?third of the household heads were reported to have left their permanent jobs by 55 and one?half of them left jobs before 60.
In aging research, retirement is one of the most important concepts, and is often viewed as synonymous with chronological age. According to some findings, many people hold the idea that when people become old, they are supposed to retire. Therefore, retirement is traditionally associated with the notion of old age: retired people are old, and old people are retired (McConnel, 1983). This notion arises from the widespread use of 65 as both the "normal" retirement age, and consideration of the age at which a person is legally defined as old (McConnel, 1983) through social welfare programs.
However, other research has demonstrated that the age individuals expect to retire is not equal to old age. Older worker perception of retirement is different from perception of old age. Hanks' research (1995) showed that the mean age of expected retirement among subjects was 64.9 while the "average age become old" was 71.7 for men and 71.0 for women.
These studies have indicated the difference between the individual's perception of old age and the expected age at retirement. To some persons expecting to retire, retirement may not be regarded as a synonym of old age, but may be considered as a transition of roles inspired and driven by the external social forces such as age norms, values and attitudes towards old persons. Since retirement age is being set by corporate and government policies which are not always harmonious, individuals are being offered more choices as to whether they will retire on time or retire early.
Moreover, age norms and retirement norms have changed as life expectancies have increased and retirement has become institutionalized. Most people might expect to be healthy and productive in later life, but might not expect to remain in the work force until they become frail and unable to work. Chronological age is becoming less common as the determinant of retirement, while more and more social and cultural factors have been recognized as having impacts on individuals' decisions regarding retirement. It is, therefore, useful to find out which social factors influence retirement timing and patterns.
In retirement studies, various factors have been found to influence retirement. These include health(Palmore, 1981; Foner, 1983; McConnel, 1983; Atchley, 1991; Cox, 1993; Turner and Scott, 1994; Gibson, 1996), income (Atchley and Cottrel, 1969, 1979; NCOA/Harris, 1981; Foner, 1983; McConnel, 1983; Sheppard, 1988; Turner and Scott, 1994; Gibson, 1996), job satisfaction(Foner, 1983; McConell, 1983; Sheppard, 1988; Atcheley, 1991; Turner and Scott, 1994), life satisfaction(NCOA/Harris, 1981; Sheppard, 1988), education(Cockerham, 1991; Palmore, 1981; Turner and Scott, 1994), marital status (Turner and Scott, 1994), age discrimination (Hess, 1983; Cloud, 1991; Cockerham, 1991), public and private pensions (Palmore, 1981; Sandell, 1988; Cockerham, 1991; Quadagno and Hardy, 1996).
Previous retirement research has greatly emphasized socioeconomic factors, and either attached importance to individual determinants such as health status and financial status, or focused on institutional constraints such as eligibility for Social Security benefits andprivate pension plans. Sociocultural predictors of retirement timing and process have not been given enough attention in the face of recent changes in corporate and government policies that my affect personal decisions. Moreover, little research has explored variables such as age norms, individuals' perceptions of age and retirement or the possible relationships between individuals' perceptions of healthy later life, age norms and the expected timing of retirement.
In their causal models of older workers' early exit from the labor force, some researchers hold the view that this early retirement trend has been caused by public and private pension plans. According to Burkhauser and Quinn (1994), Social Security and employer pension plans discourage work late in life. This view has been shared by many researchers such as Palmore (1981), Sandell (1988), Hurd (1990), Cockerham (1991), Henretta (1994), Quadagno and Hardy (1996) and Sheppard (1996). Therefore, the trend toward early retirement has usually been interpreted as the consequence of some peculiar twist of a particular country's social welfare system (Kohli, 1994). These causal models indicate that early retirement is the result of social policies that create attractive possibilities for retirement. Therefore, some researchers suggest increasing the minimum age for Social Security benefits so that the early retirement trend might be reversed (Kohli, 1994). Some scholars even suggest raising to 75 the age of eligibility for Social Security benefits (Barbara Silverstone, in Riley, 1996).
Although these studies and analyses are convincing, some questions concerning retirement timing remain unanswered. There are some sociocultural factors such as age norms, perception of age and life course events which I assume to have important impacts on retirement timing but have received less attention in retirement research. In considering the timing of retirement, older workers might be influenced by age norms, perception of age as well as the timing of other important life course transitions such as marriage, childbirth. Older workers might also take into account the retirement ages of significant others such as co?workers, friends, parents and spouses. These propositions need to be supported by empirical evidence and will be included in this study.
Definition of terms. Several terms need to be defined before continuing this discussion. Age normstell what people in a given life stage are allowed to do and to be, as well as what they are required to do and to be (Achley, 1991). They are age related?concepts which guide people's behaviors as in: "When people become old, they retire" or "Retirees are old people" (McConnel, 1983). Perception of age is defined as a person's concept of her or his stage in the life course. Perception of age is generalized to expectation about the age at which a man becomes old, or the age at which a woman becomes old. Self is defined by Mead as the sum total of peoples' conscious perceptions of their identities as distinct from others (Turner, 1991). Significant other is a term used by Mead to refer to those individuals who are most important in the development of the self, such as parents, friends, and teachers.
In this study, the significant others are limited to peers, fathers and spouses. Early retirement is defined as receipt of a retired?worker benefit from age 62 to 64 (Sheppard, 1996). Exiting the labor force before age 62 is defined as "very early retirement" (Sheppard, 1996). Hanks' definition of early retirement is retirement that occurs at least three years before it was planned when pre?retirement planing was initialized by the worker (1991). Expected life length is defined as the average number of years individuals expect to have healthy and productive lives.
In studying retirement timing, chronological age was treated as an important variable by most aging researchers during early decades of this century. In the 1970's, researchers began to pay attention to social age in aging studies. More and more social factors have been recognized as important influences on retirement in the framework of the life course perspective. In her research, Neugarten and Datan (1973) not only focused on historical time, but also emphasized the "social time" in determining retirement timing and patterns. However, literature on retirement from the life course perspective is comparatively limited.
Research on retirement was conducted by Henretta and his associates in the 1990's. This research was based on the 1982 Social Security New Beneficiary Study. The analysis, however, was limited to men. Moreover, the authors acknowledged two shortcomings: "it ignores the segment of the population that does not retire, and it does not reflect the complexity of the retirement process (Henretta et al, 1992).
These researchers cited other findings and emphasized that family factors had been given the least attention (Beehr, 1986 in Henretta, 1992). Family considerations, including marital status and support of dependents, have been shown to play a role in retirement timing of men (Barfield and Morgan, 1969; Gustman and Steinmeier, 1984; Henretta and O'Rand, 1983; all in Henretta, 1992). Nevertheless, Henretta et al. (1992) also reported that the basic insight of their findings was that the reason for retirement is only an approximate indicator of the process leading to retirement. Although family considerations were also acknowledged as important factors in studying retirement timing, little empirical evidence has been submitted to support this proposition (Henretta, 1992).
The importance of family variables has been affirmed among researchers since 1970's. In recent discussions on the relationship between families and retirement, Hanks (1990) found that family considerations were important variables in retirement timing. Scinovacz et al. (1992) emphasized the important linkages between retirement and families and the necessity to examine the impact of family structure changes on future generations of retirees. According to Scinovacz and her associates, increase in the divorce rate, low fertility rates, and delayed parenthood alter patterns of family obligations over the life course, which may in turn alter retirement timing. This proposition needs empirical support.
Another recent study (Richardson et al., 1992) examined retirement expectations of African American professionals. Unfortunately, measurement difficulties with scales originally designed for whites decreased the significance of the results. The findings showed that the mean age of retirement was 60.8, but 28 percent of the sample declined to answer at what age people should generally retire (Richardson et al., 1992). This study demonstrated that subjects were particularly sensitive to questions related to old age and retirement. This result illustrates the general difficulty of measuring age? related variables.
Another retirement study focused on midlife university employees. This study assessed the factors influencing attitudes toward retirement and retirement plans with a mail survey of 2,760 university employees in five Northwestern states. Gender, age, marital status, occupational status, educational attainment, income, perceived health, number of children, and age and number of dependent children were independent variables (Turner et al., 1994). Although the authors emphasized the linkages between retirement and family contribution, caution must be exercised in generalizing these results to other occupational settings and job categories.
In summary, the previous findings have demonstrated the importance of the linkage between family and retirement. There are limitations in measurements and sampling problems. However, little attention has been paid to studying the relationship between the early retirement trend and increasing life expectancy. Moreover, sociocultural factors such as age norms and perception of aging and life course events have been ignored in most of the literature.
Sociological thought on aging crystallized into theories of age stratification and the life course perspective in the early 1970's through the works of Matilda White Riley and Bernice Neugarten (Fry, 1996). Coincidently, researchers began to focus on the early retirement trend within the framework of age stratification theory. The question "How to determine the appropriate age for retirement, given the increase in life expectancy" was initiated as one of the most important issues in an essay by Riley (1982). Earlier than Riley's essay, Neugarten began to emphasized "social time" in studying retirement timing (Neugarten & Datan, 1973). Thus, the characteristics of change and the reciprocal interaction between individuals, society and history became the essential factors in the age stratification perspective and the life course perspective. "Age norms", "the life course" and "Perception of age" have become basic concepts for thinking about age (Fry, 1996).
From the symbolic interaction perspective, perception of self and significant others is also useful in studying individual behavior. Therefore, in this research, I attempt to evaluate the utility of age stratification and its close companion, the life course perspective, in explaining changing expectations about retirement and explaining the current early retirement trend in the United States. The theoretical utility of symbolic interaction is also evaluated. The present research is limited to analyzing sociocultural factors. I assume that variables related to age norms, perception of age, life course events, self and the retirement age of others have significant impacts on the timing of retirement among older workers.
Age Stratification Theory
According to age stratification, society is stratified into different categories in which age is the basis for this stratification. Age is a basis for acquiring roles, status, and deference from others in society. When people become old, they exit roles as workers and take on roles as retirees. In this perspective, the basis for the transition between work and retirement is chronological age. Therefore, the retirement age is closely related to old age. People born in the same cohort have similar experiences in time and may share meanings, ideologies, orientations, attitudes and values (Riley, 1994). Also, people in the same cohort are more likely to share expectations regarding the timing of life course transitions.
However, because society changes, people in different cohorts age in different ways (Riley, 1994). Therefore, age norms change in different historical times. For example, a 20?year?old man in 1900 could scarcely have looked ahead to retirement at all. Today such a man can expect to spend nearly one?quarter of his adult lifetime in retirement (Riley, 1988).
In response to social change, millions of individuals in a cohort begin to develop new age?typical patterns and regularities of behavior (changes in aging). These behavior patterns then become defined as age? appropriate norms and rules which are reinforced by "authorities," and thereby become institutionalized in the structure of society (social change). In turn, these changes in age norms and social structure redirect age? related behaviors (further changes in aging). In the early years of the Twentieth Century, a 60?year?old? worker could regard himself as old but would not expect to exit the labor force because there were different age norms about retirement and longevity (Riley, 1996).
In contrast, a 60?year?old?worker in 1990's might expect to retire, but not consider himself old. Furthermore, he or she might expect to have a healthy and productive life until over 70 and spend 15?25 years in retirement. In the last decade of the Twentieth Century, age norms allow people to retire earlier before they become disabled by illness or decline in old age. Retirement is seen as a right earned by older workers because of their lifelong service. Therefore, expected age of retirement might be different from expected longevity, because age norms and retirement norms are inconsistent as a consequence of greater longevity and the institutionalization of retirement.
According to Passuth and Bengtson (1988), the age stratification perspective represents a major advance over previous theories in social gerontology because this model emphasizes significant variations between older people and suggests the need to analyze historical and social factors in aging. This theory, however, is also viewed as having limited value in explaining a particular individual's behavior, although it may have value in lending itself to historical, sociological explanations for the attitudes and behaviors of age cohorts (Cox, 1993). Moreover, age stratification theory is thought to have so far yielded few empirical studies (Cox, 1993) because this perspective is considered quite abstract (Marshall, 1996).
According to the age stratification perspective, age norms have changed, workers can leave the labor force before they are legally defined as old through such programs as Social Security and Medicare, or before they are socially and psychologically accepted as old. Retirement is not necessarily associated with old age and should not be deemed as a loss of status or prestige, but should be regarded as a role transition because of the institutionalization of retirement and other late life roles.
For the most part, age and retirement are still linked, but this is changing. As age norms change, individuals will expect to have longer and healthier lives, but will not expect to work so long. Atchley (1988, p.187, in Hanks, 1990) stated that "it is important to recognize that while retirement was historically linked with old age, this linkage has never had a substantial basis in fact." The linkage of age with retirement was largely a by?product of the Social Security system and private corporate retirement pensions. Therefore, it is hypothesized that the expected age of retirement is related to expectations for having a long and healthy life. It is also hypothesized that an individual's perception of age is related to his or her expectation about length of healthy life.
The Life Course
Although it was seen as a child of age stratification theory (Marshall, 1996), the life course perspective is a recent conceptual development within social and behavioral analyses of aging (Passuth and Bengtson, 1988), and is the reigning approach in contemporary social gerontology (Marshall, 1996). Three research emphases in life course perspective are described by Hagestad and Neugarten (Lachman, 1985) as follows: (1) the study of the timing of adult role transitions such as getting married, finishing school, completing military service, getting a job and retiring; (2) the analysis of age norms (e.g. old people are expected to retire); and (3) the study of perception of age (e.g. at what age is a person "middle?aged", at what age a man becomes old). As chronological age is becoming a poorer and poorer predictor of the way people live, the concept of social age was developed by Neugarten and Datan within the framework of the life course perspective (Fry, 1996). Social age refers to the social timetable of the life course as defined by people's expectations or norms at different ages (Elder, 1985).
In theory, age expectations specify appropriate times for major events and transitions. There is an appropriate time for entering school, leaving home, getting married, having children, and retiring. Accordingly, individuals choose the timetable for their retirement not only based on their chronological ages, but also based on their perceptions of age or their social timetables. These perceptions of age may be associated with cues from family history, social groups in which the individuals are involved, cohort experiences and current social norms. Therefore, older workers might expect to retire at the age they are socially considered to be old, although they might be healthy and productive.
Family dynamics take place take place over an extended span of time. A trajectory begins with a major transition in the life course which has particular meaning. A new trajectory can cause an individual to change the sequencing of life events. For example, when individuals must accept family responsibilities such as rearing children who were born in later life or rearing grandchildren, their timetables for retirement might be altered in spite of the fact that they are socially defined as old and are expected to leave the work force. The retirement decision may take into account the family developmental stage as well as the individual's readiness for retirement.
According to Marshall (1996), the life course perspective has both normative and interpretive aspects and has merit in attempting to link the micro?macro levels of analysis. As the leading exponent, Elder has articulated specific interaction mechanisms that constitute micro?macro linkages over the life course (Marshall, 1996). However, Marshall regarded these dynamics as "quite abstract" because Elder's conception of social structure is seen as a structure of roles. The life course is seen as a sequence of transitions, role entries and exits, constituting a trajectory (Marshall, 1996). The whole life of an individual is analyzed as a unit in the life course perspective. Therefore, it is considered a theoretical model of aging (Marshall, 1996).
According to the life course perspective, a person might expect to retire when individual conditions meet an expectation that retirement is appropriate. The expected age at retirement is related to the perception of old age. That is the age individuals expect to retire is related to the age a man becomes old and a woman becomes old. Furthermore, family events in one's life course have important impacts on individuals' decisions according to the life course perspective. Therefore, the expected age at retirement is expected to be related to having a child living in home and having a grandchild living in home. (To be continued)
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