What is it about?
We estimate the effect of the Big Five personality traits on the retirement decisions of individuals aged between 50 and 80 years in fourteen European. We investigate the probability of retirement and a measure of the distance between actual retirement and ordinary retirement age. Overall, we find that personality affects retirement decisions, and the effects are similar across gender. Openness to experience, conscientiousness and extraversion are generally associated with a delay in retirement decisions, whereas neuroticism anticipates the exit from the labour market.
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Why is it important?
The above results point to the importance of psychological factors on labour market decisions. Since policy makers are increasingly considering behavioural responses when designing new reforms, they should also focus on these aspects related to personality. Our results may also speak to career counsellors and employers when dealing with the career of older men and women in specific jobs. Indeed, since personality can shape their willingness to continue to work and their retirement decisions, some specific nudging strategies can be implemented.
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This page is a summary of: Big five personality traits and retirement decisions, Labour, November 2021, Wiley, DOI: 10.1111/labr.12210.
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