Cliff-edge or atypical retirement? Exploring retirement trajectories of post-war baby boomers in the Netherlands

The present study analyses retirement processes using an exploratory lens. State pension age is gradually increasing in many countries, including the Netherlands. The traditional retirement pathway where individuals have a cliff-edge transition from a full-time job with a permanent contract to full retirement appears to be applicable to an increasingly smaller group of employees. Hence, more recently, `retirement' is not viewed as a single transition out of the labor force but rather a process determined by several intertwined contractual and financial aspects of the labour market. Research has hardly ever combined labour market aspects such as job security (type of employment contract), financial security (income), work intensity (hours worked), and social protection (receipt of pension and other benefits). This study aims to address this knowledge gap. We use register data from Statistics Netherlands and treat the status of individuals before and immediately after retirement as a latent variable (`Labour-Economic Status') measured by several indicators: contract type, working hours, self-employment, income, and different types of benefits including pension. We follow older workers between 2008 and 2019 for a period of at least four years before and two years after state pension age and derive trajectories of Labor- Economic Status with the use of a Mixture Hidden Markov Model. The results indicate the presence of several avenues of retirement: ‘Retirement with medium/high pension’, ‘From non-employment to low pension’, ‘Eventually partial retirement’, ‘Steps from employment to low pension’ and ‘Alternating work and non-work’. In conclusion, it seems to be the case that most older workers cannot be simply categorized to either having cliff-edge transitions or reinventing retirement in the Netherlands