Workers who find new jobs after age 50 often take pay cuts, give up pension and health care benefits, and lose managerial duties. But their new jobs often involve less stress and more flexible schedules, a new study found.
An Urban Institute and AARP Public Policy Institute analysis of 1,705 workers over a 14-year period beginning in 1992 when they were between ages 51 and 55 until 2006 when they were ages 65 to 69 found that 27 percent found new jobs during that period. The older workers who switched jobs saw their median hourly wage drop from $16.86 at the old job (in 2007 dollars) to $10.86 at the new job. Employees who changed places were also less likely to have a pension and health insurance at their new job. Only 20 percent of the employees received traditional pensions in their second career, compared to 61 percent in the old job. And the percent of employees receiving employer-sponsored health insurance dropped from 70 percent to 56 percent.
The reason workers left their previous position does play a role. About 35 percent of the workers left their jobs involuntarily because of business closures, layoffs, or health problems. “People who changed occupations because of a layoff ended up earning about 2/3 as much on the new job as on the old job,” says Richard Johnson, a principal research associate at the Urban Institute and coauthor of the study. “If you look at people who quit their old job, they are earning about the same as the old job at the new job.” Only 46 percent of the workers who were employed full-time in 1992 ever cite retirement as their primary reason for leaving the workforce. However, some people who separated from their job for other reasons did eventually start calling themselves retired.
But even thought the workers were generally financially worse off in their new positions, they overwhelmingly stated that they liked the new job better. A whopping 91 percent of the workers said they enjoyed their work at their new position, up from 79 percent in the old job. Those reporting stressful work conditions dropped from 65 percent in their initial career to 36 percent in their late-life job. And the number utilizing a flexible work schedule jumped from 27 percent in the old job to 45 percent at the new one. “They are amore satisfied and they report less stress because it appears that they have more control over what they are doing and they certainly don’t have a lot of people telling them what to do,” says Susan Reinhard, senior vice president of the AARP Public Policy Institute. The more relaxed schedule may be due in part to relinquishing management responsibilities. Only 14 percent of the employees worked as managers at their new job, compared with 22 percent in the past. The number of self-employed workers also doubled from 12 percent in 1992 to 24 percent in 2006.
Nearly two thirds of the seniors in the study who switched jobs also found completely new occupations or industries. Says Johnson: “Don’t feel like just because you have done something for most of your life that it is something you have to do for the rest of your life.”