The Role of Physical Job Demands and the Physical Work Environment in Retirement Outcomes

Abstract

We provide new evidence on the role of physical job demands and the physical work environment on retirement outcomes by linking occupation-level data on job requirements from the Occupational Requirements Survey (ORS) to individual-level data from the Health and Retirement Study (HRS). Using alternative strategies to address missing data, and after examining the concurrent validity of ORS job requirements with analogous measures from the Occupational Information Network (O*NET), we create a composite index of physical job demands comprising strenuous physical activities (e.g., lifting and strength) and a composite index of physical work environment comprising hazardous or taxing environmental conditions (e.g. noise, heat). We use these validated indices to estimate associations between job demands and retirement outcomes controlling for observed individual and household characteristics. We find that a one standard deviation increase in our index of physical jobs demands is associated with a 10 percentage point increase in the probability of being retired at any age and a 1.8 percentage point increase in the probability of transitioning into full retirement from full-time work. The same size increase in our physical work environment index is associated with a 7 percentage point increase in the probability of being retired, but it does not provide additional explanatory variation for transitions into retirement. These effects are almost entirely concentrated in men, who hold jobs that are significantly more physically demanding than women’s, and they are also larger among older and less-educated workers.