Late careers in Europe: Effects of individual and institutional factors

Abstract: In this article, I estimated the effects of individual and institutional factors on labor-force participation and transition to inactivity for older males in eleven European countries, using the first two waves of SHARE. The application of multilevel methods allowed to estimate the share of variance in international late careers that can be attributed to country-specific factors and to quantify the relative impact of specific institutional backgrounds. The share of variance in labor-force participation and labor market exit among males aged 50 years that can be attributed to institutional characteristics is about 6–7 per cent. About 86 per cent of the regional variance of labor participation and 50 per cent of the regional variance in labor exit in Europe can be attributed to country-specific factors, including institutional differences in pension systems and welfare arrangements, employment relation systems, education systems, and employment-sustaining active labor-market policies. Moreover, financial incentives to keep older males in the labor market are outweighed by the monetary incentives of the pension systems, and this applies to both employment maintenance and employment exit