Involuntary retirement and organizational climates: A multilevel study of older workers

Maintaining control over the retirement transition is crucial for post-retirement well-being. Yet, studies show that between 10% and 40% of employees experience involuntary retirement. This study investigates three separate reasons for involuntary retirement: poor health, organizational pressures, and reaching the quasi-mandatory pension age. Guided by a life-course framework of agency and structure, we analyze how collective and individual perceptions of development, accommodation, and post-retirement work climates shape separate reasons for involuntary retirement, as opposed to voluntary retirement.

Using multi-level panel data from the Netherlands, we estimate multi-level logistic regression models on 3,735 respondents nested in 501 organizations. We assess how organizational climates, which vary systematically between organizations, and individual-relative perceptions, which vary systematically within organizations, are associated with different involuntary retirement reasons.

Reaching the quasi-mandatory retirement age was the main reason for involuntary retirement. Across organizations, a supportive organizational climate for development reduced involuntary retirement. At the individual level, employees who perceived more supportive accommodation and post-retirement work climates relative to their colleagues were less likely to experience involuntary retirement. Organizational and individual-relative climates revealed distinct associations with different reasons for involuntary retirement.

Our results suggest that involuntary retirement is a multi-dimensional phenomenon shaped by micro-, meso-, and macro-level constraints. Supportive organizational policies and practices enhance employees' agency, with some differences depending on the reason for involuntary retirement. Policies encouraging training of older workers may increase both labor force participation and older employees' choices as they near retirement.