Early retired or automatized? Evidence from the survey of health, ageing and retirement in Europe

Abstract

This paper measures the implications of the automation process in the labour market for the early retirement decisions in 26 European countries. In order to perform the analysis, we use microdata from the Survey of Health, Ageing and Retirement in Europe, occupation-level data on automation degree and automation risk and a technological classification of occupations in 4 terrains. We find that the current technological change is playing a significant role in the early retirement decisions, although it affects heterogeneously certain groups in the sample (regarding gender, education level and job status). This fact leads to a contradiction between governments trying to delay retirement ages and labour markets trying to expel workers earlier. Therefore, we conclude that, in order to elaborate policies on ageing and retirement, the effect of new labour-saving technologies in older worker’s decisions must be taken into account. We propose that the delay in statutory retirement ages should be accompanied by training programs and/or policies promoting self-employment for workers at risk of ending their working lives prematurely. Furthermore, the programs aimed to relocate middle-age workers displaced from their original occupations should focus on finding a new occupation among those which are less affected by automation processes.