Association for Public Policy Analysis & Management

Occupational transitions in the late working years are common, and may reflect a desired gradual transition to retirement or bridge jobs. Yet such transitions may also be responses to adverse health events, which occur with increasing frequency as workers age. Understanding how the occupational paths for workers who experience new health conditions differ from those for workers who do not may point to the types of supports that might allow the former to remain in the labor force longer, thus delaying claims for federal disability and retirement benefits, and potentially reducing the risks of poverty into the retirement years. In this paper, we use data from the Health and Retirement Study linked to the Department of Labor’s O*NET data to assess variations in occupational transitions for workers who experience a new work-limiting health condition after age 55 and for those who do not. We find that for workers who remain in the labor force, occupational transitions are common for both groups. Transitions to occupations that are substantially different from the occupation held at age 55 are more common than transitions to occupations that are similar. Relatively few workers remain in the occupation they held at age 55 until they reach age 67, after full Social Security retirement benefits are available. The largest difference between workers who experience new health conditions and those who do not is that the former are much more likely to stop working early: Conditional on remaining at work, the transitions between those who experience new health limitations are quite similar to those who do not.