Retirement Kills

Kai RYSSDAL: Time now for a little Freakonomics Radio. It’s that moment every couple of weeks where we talk with Stephen Dubner, the co-author of the books and blog of the same name — it is the hidden side o’ everything. Welcome back, Dubner.

Stephen DUBNER: Hey Kai, thank you. This time, I’m curious — don’t take this the wrong way, but you’re not thinking about retiring anytime soon, are you?

RYSSDAL: No. Do you know something I don’t know?

DUBNER: I do not. But since you’re not, that puts you in good company. The Great Recession have put a lot of retirement plans on hold for a long time — often at the behest of governments who can’t afford to pay pensions. Germany, the U.K., France — they’ve upped their retirement ages. And we’re seeing a lot more older workers in the U.S. as well.

Here’s Lisa Boily from the Bureau of Labor Statistics.

Lisa BOILY: O.K., in 2000, 55 and older, that group was 13 percent of the labor force. In 2010, that group was 20 percent of the labor force. By 2020, our projections show that that group will represent 25 percent of the labor force.

RYSSDAL: My gut tells me that my initial inclination on this is wrong — that’s just people getting older, right? Isn’t that the deal?

DUBNER: Demographics are real; there are more older people. But people also are working longer. So the share of workers over 65 in this country is the highest it’s been in more than 50 years.

RYSSDAL: So we’re going to have to work until not 60s, but mid-70s sometime, right?

DUBNER: Well look, it may sound terrible but Kai, I’m happy to say, there’s a hidden side, a little silver lining here to consider. So the economist Josef Zweimuller, at the University of Zurich, recently did a study that looked at two fairly identical groups of blue-collar workers in Austria. One group that got early retirement up to three and a half years earlier than the other, and what Zweimuller found is that early retirement — as much as we may crave — actually, has a considerable downside.

Josef ZWEIMULLER: I mean, actually, what we find in our study is that among blue-collar workers, we see that workers who retire earlier have higher mortality rates. And these effects are pretty large.

RYSSDAL: Higher mortality rates — they die, the people who took the early retirement?

DUBNER: Correct. The study showed that for every extra year of early retirement, you lose about two months of life expectancy. And I should say, this is not the first study to show there’s a fairly strong relationship between early retirement and earlier death.

RYSSDAL: What we do we know about the causes of these deaths? Is it heart attack? What is it?

DUBNER: A lot of them cardiovascular, likely due to things like more smoking and drinking, worse diet, not enough exercise. But there’s also evidence to show it goes beyond the physical, that working longer is tied to better mental health as well.

Here’s Mo Wang, he’s a psychologist at the University of Florida who studies retirement.

Mo WANG: Working actually gives you a way to structure life and that’s very important. Usually, it’s interesting you see people travel right after they retire, but then after like one or two years, people just sit at home watching TV.

DUBNER: So this raises a bit of an existential quandary, right? Life expectancy at birth in the U.S. has doubled over the past century. Miraculous. Which means that we’ve gained more and more years — potentially — of retirement. But we’re still figuring out what to do with all those years.

Here’s my Freakonomics friend and co-author Steve Levitt — as you know, he’s an economist at the University of Chicago.

Steven LEVITT: So now we’ve created this artificial, sort of absurdly long chunk of years — for many people 25 or 30 years — where you’ve got nothing to do, but the government essentially pays you to do nothing. So I think retirement as we have it today is crazy.

RYSSDAL: Says the academic who sits around and thinks all day.

DUBNER: And says the economist who wants to squeeze more productivity out of us.

RYSSDAL: Right, he wants us to work longer and harder?

DUBNER: Right, but here’s the thing: it may be for our own good. If early retirement leads to worse health outcomes, you start to see the virtue of working longer. Of course, it all depends on how you define “work” — and if you can kind of have your cake and eat it, too. That is exactly the way Steve Levitt, by the way, is planning his retirement.

LEVITT: So my second career will be to aspire to be a professional golfer. So it’s not something I’ll ever actually attain, but I’m going to call my full-time golfing ‘work.’

RYSSDAL: Nice work, if you can get it. Stephen Dubner, Freakonomics.com is the website. We’ll see you in a couple of weeks.

DUBNER: Thanks for having me, Kai.