Determinants Of Involuntary Employment In Europe

The worker’s perception of a forced decision to work (i.e. involuntary employment) has a negative effect on the overall well-being of the older worker (aged 50 and above). This paper first investigates the job situation, the financial and health situation and the relationship status of the involuntary workers. The micro data of the Survey of Health, Ageing and Retirement in Europe (SHARE) allows for panel estimations. We control for unobserved differences in personality traits between voluntary and involuntary workers. We find that the job situation of the worker and the retirement of the partner are important drivers of involuntary employment. Specifically, involuntary workers are more frequently employed in jobs that are physically demanding or that have more stress related tasks. Involuntary workers also often feel underappreciated for their work by the management or colleagues. Second, we focus on cross-country differences. The fraction of involuntary workers in the labor population aged 50 and more ranges from 29 percent in Switzerland to 62 percent in Spain. We find that in the countries with the lowest rates of involuntary employment, the involuntary workers have better working conditions and are more easily able to make ends meet. Furthermore, the country dummies in our estimations indicate that the probability of being involuntarily employed is partly explained by time-invariant factors that differ across countries, for example public policies, e.g. pension systems. We investigate cross-country differences in four aspects of the pension system. The countries with the lowest rates of involuntary employment are those with the highest rates of partial and joint retirement.