The Role of Physical, Cognitive, and Interpersonal Occupational Requirements and Working Conditions on Disability and Retirement

Abstract

We examine of the role of physical and mental job requirements, as well as hazardous working conditions, on retirement and disability among older individuals in the United States. 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), we create composite indices for physical activities and the physical work environment, as well as two indices of mental job requirements related to job autonomy and flexibility index, and being supervised and working with the pubic. Using data from the HRS Life History Mail Survey, we merge these indices to the HRS panel using the most important occupation held by the individual in her prime years. We find that a 1 standard deviation (SD) increase in the physical activity and physical work environment indices are associated with a 10 to 13 percentage point (pp) increase in the probability of being retired and a 3 to 5 pp increase in the probability of transitioning into retirement. The associations of these indices with disability outcomes follow the same patterns as retirement, but they are lower in magnitude. A 1 SD increase in job autonomy/flexibility is associated with a 22 pp decrease in the probability of being retired and a 12 pp decrease in retirement transitions, but it does not predict disability outcomes. Finally, the effects of physically demanding and hazardous jobs on labor force exit are concentrated among men and low-educated workers, while delays in retirement predicted by higher job autonomy and flexibility are driven by college-educated workers.