Scarring effects across the life course and the transition to retirement

This thesis investigates the long-term negative effects of unemployment, labour market inactivity and atypical employment. Within the theoretical framework of cumulative advantages and disadvantages, it is outlined how life-course differentiation creates gaps between age peers and cohorts and how this leads to social inequality in old age. In the three separate, but linked studies, disadvantages across the career and their associations to retirement are analysed. The focus of the analyses is laid on the outcomes of career disadvantages in form of subjective and financial well-being. The three studies all use the Survey of Health, Ageing and Retirement in Europe. This large and multidimensional panel study provides not only prospective, but also retrospective data on European countries. The data base is employed in different combinations in the studies. In the first and second study, the retrospective wave SHARELIFE provides information on employment biography and is related to well-being indicators of the regular waves. In the third study, the persistence of disadvantages upon retirement is observed with a causal model. The first study investigates how disadvantages are affecting careers and subjective well-being of older Europeans. In two complementary analyses, first the employment history of older Europeans is studied with sequence analysis methods to show how non-employment and part-time work shape careers and to illustrate gender differences. In a second step, indicators of timing and duration, exemplifying the accumulation mechanisms, are related to subjective well-being in old age. The results indicate that women experience more turbulent careers with more periods of non-employment and part-time employment. However, this is not reflected in lower subjective well-being in old age. Accumulation of non-employment disadvantages is far more comprehensive for men than for women. Part-time employment has an ambiguous effect for women, but is not relevant for men. In the second study, the household level is added and it is analysed how an adverse employment history is related to wealth accumulation. The results show that cumulative non-employment and employment in lower occupations has significant disadvantages for wealth accumulation in old age. However, large differences for men and women remain. Particularly, the household composition and household factors are decisive in the effectuality of these disadvantages. The third study includes the scarring question, that means if career disadvantages continue beyond the working life. The study examines whether non-employment disadvantages are still found in retirement and the extent to which well-being levels change in the transition to retirement. Well-being scores before and after retirement are obtained and unbiased effects of the retirement transition are identified. Results indicate that being unemployed before retirement is associated with an increase in life satisfaction, but presents mainly a catching-up effect compared to employed persons transitioning to retirement. Findings are robust to selection into unemployment and country differences