Most people agree that extending the working life is a desirable goal. Yet, there is much to be known about the factors determining the decision to retire. In this paper, we analyze the role played by one of them: routine intensity of the occupation. We show that workers in more routine occupations tend to work less hours, but we did not find any significant effect on the decision to retire.

1. Phasing out of the labor market
Phasing out of the labor market
Lucas van der Velde
GRAPE
Group for Research in APplied Economics
August 2016
European Association of Comparative Economic Studies

2. Phasing out of the labor market
Motivation
Introduction
Goal: study task content of jobs → retirement patterns.
Hypothesis: Routine Task Intensity (RTI) reduces labor
supply.
Intensive margin → Older people in routine jobs work less
hours.
Extensive margin → Older people in routine jobs retire sooner.

3. Phasing out of the labor market
Motivation
Task content and old age workers
Human capital story
Selective entries into growing occupations by younger workers.
(Autor and Dorn 2009, Lewandowski et al. 2015)
Contribution
Look at disaggregate data
Focus on exits rather than entries
Why tasks might matter?
Monotonous/tedious chores and retirement.
(Melamed et al. 1995, Blekesaune and Solem 2005, Loukidou et al.
2009, Dal Bianco et al. 2015)
Shifts in the demand for tasks.

4. Phasing out of the labor market
Task content of occupations
What is a task?
A task is a unit of activity that produces output.
(Acemoglu and Autor 2011)
Classification of tasks
Routine Non-routine
Cognitive Proofreading Interpreting data
Interpersonal - Negotiating
Manual Adjusting screws Repairing, cleaning.
Notes: Classification from Autor et al. (2003). Other authors introduced small changes in this categorization, see
Goos and Manning (2007), Frey and Osborne (2013), Marcolin et al. (2016)

5. Phasing out of the labor market
Task content of occupations
Technological progress, changes in demand and ...
Fall in the demand for tasks
Autor et al. (2003), David H. Autor (2002), Goos and Manning (2007), Goos
et al. (2009), Ikenaga (2009), Acemoglu and Autor (2011), Autor and Dorn
(2013), Michaels et al. (2014), Cortes (2016).
Changes within occupations
Autor et al. (2003), Spitz-Oener (2006), Autor and Handel (2013), Ak¸comak
et al. (2015), De la Rica and Gortazar (2016), Pikos and Thomsen (2016)
Competing theories
Blinder (2009), Beaudry et al. (2014, 2016)

6. Phasing out of the labor market
Data description
Operationalizing the variables
Derived from O*NET following Acemoglu and Autor (2011) with
employment weights from EU-LFS.
Occupations defined by ISCO 88 at 3-digit level.
For example
Task Variables
- Analyzing data / information
Non-Routine Cognitive - Thinking Creatively
- Interpreting information for others
Routine Task Intensity Index: Sum of routine tasks minus
non-routine tasks. (Autor and Dorn 2013, Goos et al. 2014)

7. Phasing out of the labor market
Data description
Operationalizing the variables
−4−20246
RTIindex
0 20 40 60 80 100
Skill percentile
Figure: Germany (West)
−20246
RTIindex
0 20 40 60 80 100
Skill percentile
Figure: Great Britain
ρ = .8 with Goos et al. (2014)

8. Phasing out of the labor market
Data description
Databases
GSOEP (DE) GSOEP (EG) BHPS
Period 1984-2014 1990-2014 1991-2007
Number obs. 25 ths + 10 ths + 25 ths +
Unique obs. 5 ths + 2 ths 5 ths
Hours worked 37.49 41.39 33.82
Unique failures 720 454 645
Female .46 .48 .48
Tertiary educated .24 .33 .11
Share services .68 .67 .73
ISCO88¡4 .49 .44 .39
Notes: Sample descriptors includeonly individuals between 50 and 60 who worked for at least a year in those ten
years. Household with migrants and self employed individuals not included in the sample

9. Phasing out of the labor market
Data description
Changes in Labor market status over age: extensive margin0.25.5.751
Percentageofpopulation
50 55 60 65
Age
FT PT SE UN IN
Figure: West Germany
0.25.5.751
Percentageofpopulation
50 55 60 65
Age
FT PT SE UN IN
Figure: East Germany
0.25.5.751
Percentageofpopulation
50 55 60 65
Age
FT PT SE UN IN
Figure: Great Britain
0.25.5.751
Percentageofpopulation
50 55 60 65
Age
FT PT SE UN IN
Figure: South Korea

10. Phasing out of the labor market
Data description
Changes in hours work over age: intensive margin
−15−10−50
50 55 60 65
Age
West Germany
East Germany
South Korea
United Kingdom

11. Phasing out of the labor market
Data description
Changes in average RTI over age
−1−.50.5
AverageRTI
35 40 45 50 55 60
Age
Cohort 1940 1945 1950 1955
Figure: Germany (West)
−.4−.20.2.4.6
AverageRTI
35 40 45 50 55 60
Age
Cohort 1940 1945 1950 1955
Figure: Great Britain

12. Phasing out of the labor market
Data description
Deaton decomposition of RTI changes
DE EG UK
40 base age
50 -0.56*** -0.33*** -0.20***
(0.06) (0.09) (0.06)
51 -0.57*** -0.18** -0.23***
(0.06) (0.09) (0.06)
52 -0.65*** -0.31*** -0.22***
(0.06) (0.09) (0.06)
53 -0.68*** -0.30*** -0.11*
(0.06) (0.09) (0.06)
54 -0.78*** -0.52*** -0.15**
(0.06) (0.09) (0.06)
55 -0.82*** -0.51*** -0.14**
(0.06) (0.09) (0.06)
56 -0.92*** -0.60*** -0.10
(0.06) (0.09) (0.06)
57 -0.97*** -0.70*** -0.03
(0.06) (0.09) (0.06)
58 -1.10*** -0.75*** -0.09
(0.06) (0.09) (0.07)
59 -1.27*** -0.84*** -0.03
(0.06) (0.09) (0.07)
Notes The regressions include additional controls for cohort (35) and year effects (15). Dependent variable is
average RTI at that age on each year.

13. Phasing out of the labor market
Results
Hypotheses
1 Older people in routine jobs work less hours.
2 Older people in routine jobs retire sooner.

14. Phasing out of the labor market
Results
Testing hypothesis 1
We estimate several regressions of the form:
Hoursi,t = α + RTI β + X γ +
where:
- i,t indicate individual i in time t;
- RTI are measures the routine task intensity of occupations;
- X is a vector of additional controls including age, gender,
household size, marital status, education level, experience,
industry dummies and a time trend.

15. Phasing out of the labor market
Results
Results: actual RTI
Large Base Short Q. occupation FE Prod. Tobit
Germany (West)
RTI -0.28*** -0.29*** -0.31*** -0.30*** -0.14*** -0.43*** -0.14***
(0.02) (0.03) (0.05) (0.03) (0.04) (0.03) (0.05)
Germany (East)
RTI -0.28*** -0.27*** -0.42*** -0.29*** -0.17*** -0.36*** -0.17
(0.03) (0.05) (0.08) (0.05) (0.06) (0.05) (0.11)
Great Britain
RTI -0.60*** -0.60*** -0.63*** -0.40*** -0.25*** -0.55*** -0.51***
(0.02) (0.04) (0.06) (0.05) (0.04) (0.04) (0.06)
Age group 40-60 50-60 55-60 50-60 50-60 50-60 50-60
Median wage Yes
Indiv. F.E. Yes
Productivity Yes
Tobit Yes

16. Phasing out of the labor market
Results
RTI: alternative measure
−1−.50.5
DE EG UK
Specifications Base Short
Q. job Prod. Tobit

17. Phasing out of the labor market
Results
Hypotheses
1 Older people in routine jobs work less hours.
2 Older people in routine jobs retire sooner.

18. Phasing out of the labor market
Results
Testing hypothesis 2
We estimate accelerated time failure models of the form:
Pr(retirement = t) = α + RTI β + X γ +
where:
- retirement indicates transition to retirement;
- RTI are measures the routine task intensity of occupations;
- X is a vector of additional controls including age, gender,
household size, marital status, education level, experience,
industry dummies and a time trend.

19. Phasing out of the labor market
Results
Results: hypothesis 2
Base Prod. Q. job Tobit
Germany (West)
RTI. 0.05*** 0.01 -0.03* 0.05*
(0.02) (0.02) (0.02) (0.03)
Germany (East)
RTI 0.05* 0.01 -0.01 0.05
(0.03) (0.03) (0.03) (0.04)
Great Britain
RTI 0.02 0.01 0.01 0.02
(0.02) (0.02) (0.03) (0.04)

20. Phasing out of the labor market
Conclusions
Take-home points
Task content of occupations is relevant in labor supply decisions
Older workers in more routine occupations tended to work less
hours.
No clear effect on retirement. → A human capital story?
Better design of jobs and/or retraining might have little impact on
labor supply.

21. Phasing out of the labor market
Conclusions
Points to develop further
1. Take Include workers’ preferences and motivations seriously.
2. Separate emprically task content from boredom.
3. Improve the accelerated time failure models.

22. Phasing out of the labor market
Conclusions
Goodbye frame
Thank you for your attention

23. Phasing out of the labor market
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24. Phasing out of the labor market
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25. Phasing out of the labor market
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26. Phasing out of the labor market
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