Retirement Decisions in the Age of COVID-19 pandemic: Are Older Employees in Digital Occupations Working Longer?

This paper investigates the retirement response to the pandemic and to the resulting acceleration in the adoption of new technologies. Using the European Union Statistics of Income and Living Conditions datasets and leveraging the natural experiment of many workers being forced to work from home in Europe during the lockdown, we compare the retirement response of older workers in digital occupations (i.e. more exposed to the accelerated adoption of new technologies) versus non-digital occupations to detect any differences in retirement behavior, which we interpret as digitalization effects. In addition, we analyze changes in retirement decisions by gender and geographic area. We find that retirement rates increased during COVID-19 in Europe, especially in Mediterranean countries and among women. This trend may be linked to gender occupational segregation. In Mediterranean countries, digitalization increases female retirement, likely due to challenges in balancing digital work and family responsibilities while working from home. In Eastern countries, and to a lesser extent in Northern countries, digitalization leads to postponing retirement among women, likely due to greater gender equality in unpaid work. In contrast, the retirement age for men is less affected by the pandemic with no significant differences between digital and non-digital occupations. This may exacerbate the existing gender gap in labor force participation and pension outcomes.