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

Abstract This study explores retirement processes. 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 ever-smaller group of employees. Hence, more recently, ‘retirement’ is viewed not as a single transition out of the labour force but rather as a process determined by several intertwined contractual and financial aspects of the labour market. Research has hardly ever combined labour market aspects such as employment security (type of employment contract), financial security (income), work-time arrangements (hours worked) and social protection (receipt of pension and other benefits). This study aims to address this knowledge gap using register data from Statistics Netherlands and treating the status of individuals before and immediately after retirement as a latent variable (late employment quality [LEQ]) measured by several indicators: contract type, contractual working hours, self-employment, income and different types of benefits including pension. We follow older workers between 2008 and 2019 for at least four years before and two years after state pension age and derive trajectories of LEQ using a mixture hidden Markov model. The results indicate several avenues: ‘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’. It seems to be the case that most older workers in the Netherlands cannot simply be categorised as having either cliff-edge transitions or atypical retirement.