Retirement and the Sectors: Do Private and Public Personnel Differ in Their Retirement Decision?

Abstract

Retirement is a field of growing interest in both the public and the private sectors. Given the aging workforce in Western countries, understanding the factors that contribute to an employee’s decision to retire is an area of increasing interest to political, economic, social, and organizational scholars. Most retirement studies concentrate on a narrow set of factors, examining their impact on retirement in isolation of the broader context. Drawing from public management theory, and based on theories of person–organization fit (POF), we examine whether and when private and public personnel differ in their retirement decision. Findings indicate that previously shown relationships between individual-level financial status and the decision to retire are contingent on employment sector. The results of this research extend knowledge regarding the normative influence of mechanisms driving retirement and demonstrate the broader implications of sector on retirement decision-making.

Keywords

retirement decision public sector private sector person–organization fit attraction–selection–attrition

Get full access to this article

View all access options for this article.

References

Adams

G. A.

Beehr

T. A.

(1998). Turnover and retirement: A comparison of their similarities and differences. Personnel Psychology, 51, 643-665.

Adams

G. A.

Beehr

T. A.

(2003). Retirement: Reasons, processes and results. New York, NY: Springer.

Adams

G. A.

Rau

(2004). Job seeking among retirees seeking bridge employment. Personal Psychology, 57, 719-744.

Aiken

L. A.

West

S. G.

(1991). Multiple regression: Testing and interpreting interactions. Newbury Park, CA: SAGE.

Ali

S. B.

Frank

H. A.

(2019). Retirement planning decisions: Choices between defined benefit and defined contribution plans. American Review of Public Administration, 49, 218-235.

Baarspul

H. C.

Wilderom

C. P.

(2011). Do employees behave differently in public- vs private-sector organizations? A state-of-the-art review. Public Management Review, 13, 967-1002.

Bamberger

P. A.

Bacharach

S. B.

(2014). Predicting retirement upon eligibility: An embeddedness perspective. Human Resource Management, 53, 1-39.

Bamberger

(2008). Beyond contextualization: Using context theories to narrow the micro-macro gap in management research. Academy of Management Journal, 51, 839-846.

Barnes-Farrell

J. L.

(2003). Beyond health and wealth: Attitudinal and other influences on retirement decision making. In Adams

G. A.

Beehr

T. A.

(Eds.), Retirement: Reasons, processes, and results (pp. 159-187). New York, NY: Springer.

10.

Beehr

T. A.

(1986). The process of retirement: A review and recommendations for future investigation. Personnel Psychology, 39, 31-55.

11.

Beehr

T. A.

(2014). To retire or not to retire: That is not the question. Journal of Organizational Behavior, 35, 1093-1108.

12.

Beehr

T. A.

Nielson

N. L.

(1995). Descriptions of job characteristics and retirement activities during the transition to retirement. Journal of Organizational Behavior, 16, 681-690.

13.

Belle

Cantarelli

(2015). Monetary incentives, motivation, and job effort in the public sector: An experimental study with Italian government executives. Review of Public Personnel Administration, 35, 99-123.

14.

Boyne

G. A.

(2002). Public and private management: What’s the difference? Journal of Management Studies, 39, 97-122.

15.

Bright

(2008). Does public service motivation really make a difference on the job satisfaction and turnover intentions of public employees? The American Review of Public Administration, 38, 149-166.

16.

Buelens

Van den Broeck

(2007). An analysis of differences in work motivation between public and private sector organizations. Public Administration Review, 67, 65-74.

17.

Bullock

J. B.

Stritch

J. M.

Rainey

H. G.

(2015). International comparison of public and private employees’ work motives, attitudes, and perceived rewards. Public Administration Review, 75, 479-489.

18.

Bysted

Hansen

J. R.

(2015). Comparing public and private sector employees’ innovative behaviour: Understanding the role of job and organizational characteristics, job types, and subsectors. Public Management Review, 17, 698-717.

19.

Choi

Chung

(2017). Attraction-selection and socialization of work values: Evidence from longitudinal survey. Public Personnel Management, 46, 66-88.

20.

Christensen

R. K.

Wright

B. E.

(2011). The effects of public service motivation on job choice decisions: Exploring the contributions of person-organization fit and person-job fit. Journal of Public Administration Research and Theory, 21, 723-743.

21.

Clark

(2011). Evolution of public-sector retirement plans: Crisis, challenges, and change. ABA Journal of Labor & Employment Law, 27, 257-273.

22.

Clark

Pathak

Pelletier

(2018). Supplemental retirement savings plans in the public sector: Participation and contribution decisions by school personnel. Journal of Labor Resource, 39, 383-404.

23.

Colsher

P. L.

Wallach

R. B.

(1990). Elderly men with histories of heavy drinking: Correlates and consequences. Journal of Studies on Alcohol, 51, 528-535.

24.

Crystal

(1986). Measuring income and inequality among the elderly. The Gerontologist, 26, 56-59.

25.

De Cooman

De Gieter

Pepermans

Hermans

Du Bois

Caers

Regers

M. S

. (2009). Person-organization fit: Testing socialization and attraction-selection-attrition hypotheses. Journal of Vocational Behavior, 74, 102-107.

26.

Feldman

D. C.

Beehr

T. A.

(2011). A three-phase model of retirement decision making. American Psychologist, 66, 193-203.

27.

Feldman

D. C.

Kim

(2000). Bridge employment during retirement: A field study of individual and organizational experiences with post-retirement employment. Human Resource Planning, 23, 14-25.

28.

Fottler

M. D.

(1981). Is management really generic? Academy of Management Review, 6(1), 1-12.

29.

Gkorezis

Petridou

(2012). The effect of extrinsic rewards on public and private sector employees’ psychological empowerment: A comparative approach. The International Journal of Human Resource Management, 23, 3596-3612.

30.

Gould-Williams

J. S.

Mostafa

A. M. S.

Bottomley

(2015). Public service motivation and employee outcomes in the Egyptian public sector: Testing the mediating effect of person-organization fit. Journal of Public Administration Research and Theory, 25, 597-622.

31.

Greenhous

(2011, February 28). Pension funds strained, states look at 401(k) plans. The New York Times. Retrieved from https://www.nytimes.com/2011/03/01/business/01pension.html?mtrref=www.google.com&gwh=8278CCF3F7AA6904C5C46ECDD7050D02&gwt=pay

32.

Gruber

Wise

(1999). Social security and retirement: An international comparison. American Economic Review, 88, 158-163.

33.

Herzog

A. R.

House

Morgan

(1991). Relation of work and retirement to health and well-being in older age. Psychology and Aging, 6, 202-211.

34.

Hira

Loibl

(2005). Understanding the impact of employer-provided financial education and assistance program. Journal of Consumer Affairs, 39, 173-194.

35.

Holland

H. J.

Goodman

Stich

(2008). Defined contribution plans emerging in the public sector: The manifestation of defined contributions and the effects of workplace financial literacy education. Review of Public Personnel Administration, 27, 367-384.

36.

Houston

D. J.

(2000). Public-service motivation: A multivariate test. Journal of Public Administration Research and Theory, 4, 713-727.

37.

Ilfeld

(1976). Characteristics of current social stressors. Psychological Reports, 39, 1231-1247.

38.

Jacobesen

C. B.

Kjeldsen

A. M.

(2011, June 2-4). Public service motivation and employment sector: Attraction or socialization? Paper presented at the PMRA Conference, Syracuse, NY.

39.

Jensen

U. T.

Vestergaard

C. T.

(2017). Public service motivation and public service behaviors: Testing the moderating effect of tenure. Journal of Public Administration Research and Theory, 27, 52-67.

40.

Jex

Wang

Zarubin

(2007). Aging and occupational health. In Shultz

K. S.

Adams

G. A.

(Eds.), Aging and work in the 21st century (pp. 199-224). New York, NY: Psychology Press.

41.

Jiang

Liu

McKay

P. F.

Lee

T. W.

(2012). When and how is job embeddedness predictive of turnover? A meta-analytic investigation. Journal of Applied Psychology, 97, 1077-1096.

42.

Johns

(2006). The essential impact of context on organizational behavior. Academy of Management Review, 31, 396-408.

43.

Jung

Bozeman

Gaughan

(2018). Fear in bureaucracy: Comparing public and private sector workers’ expectations of punishment. Administration & Society. Advance online publication. doi:10.1177/0095399718783647.

44.

Juriewicz

C. L.

Massey

T. K.

Brown

R. G.

(1998). Motivation in public and private organizations: A comparative study. Public Productivity & Management Review, 21, 230-250.

45.

Karl

K. A.

Sutton

C. L.

(1998). Job values in today’s workforce: A Comparison of public and private sector employees. Public Personnel Management, 27, 515-527.

46.

Kim

(2018). The effects of relative organizational tenure on job behavior in the public sector. Public Personnel Management, 47, 335-355.

47.

Kim

(2012). Does person-organization fit matter in the public-sector? Testing the mediating effect of person-organization fit in the relationship between public service motivation and work attitudes. Public Administration Review, 72, 830-840.

48.

Kim

Feldman

D. C.

(1998). Healthy, wealthy, or wise: Predicting actual acceptances of early retirement incentives at three points in time. Personnel Psychology, 51, 623-642.

49.

Kim

Feldman

D. C.

(2000). Working in retirement: The antecedents of bridge employment and its consequences for quality of life in retirement. Academy of Management Journal, 43, 1195-1210.

50.

Krause

(1995). Stress and well-being in later life: Using research findings to inform intervention design. In Bond

L. A.

Cutler

S. J.

Grams

(Eds.), Promoting successful and productive aging (pp. 203-219). Thousand Oaks, CA: SAGE.

51.

Krause

(1996). Neighborhood deterioration and self-rated health in later life. Psychology and Aging, 11, 342-352.

52.

Kristof-Brown

Zimmerman

R. D.

Johnson

E. C.

(2005). Consequences of individuals’ fit at work: A meta-analysis of person-job, person-organization, person-group, and person-supervisor fit. Personnel Psychology, 58, 281-342.

53.

Leland

Smirnova

(2009). Reassessing privatization strategies 25 years later: Revisiting Perry and Babitsky’s comparative performance study of urban bus transit services. Public Administration Review, 69, 855-867.

54.

Lewis

G. B.

Pitts

(2018). Deciding to retire from the federal service. Review of Public Personnel Administration, 38, 49-82.

55.

Lin

T. C.

Hsieh

A. T.

(2001). Impact of job stress on early retirement intention. International Journal of Stress Management, 8, 243-247.

56.

Lynos

S. T.

Duxbury

L. E.

Higgins

C. A.

(2006). A comparison of the values and commitment of private sector, public sector, and parapublic sector employees. Public Administration Review, 66, 605-618.

57.

Meglino

B. M.

Ravlin

E. C.

(1998). Individual values in organizations: Concepts, controversies, and research. Journal of Management, 24, 351-389.

58.

Mortimer

J. T.

Lorence

(1979). Work experience and occupational value socialization: A longitudinal study. American Journal of Sociology, 84, 1385-1391.

59.

Moynihan

D. P.

Pandey

S. K.

(2007). The role of organizations in fostering public service motivation. Public Administration Review, 67, 40-53.

60.

National Institute on Aging. (1986). Established populations for epidemiologic studies of the elderly. In: Cornoni-Huntley

Brock

D. W.

Ostfeld

A. M.

Taylor

J. O.

Wallace

R. B.

(Eds.), Resource data book. Bethesda, MD: National Institutes of Health.

61.

E. S.

Sears

G. J.

(2015). Toward representative bureaucracy: Predicting public service attraction among underrepresented groups in Canada. Review of Public Personnel Administration, 35, 367-385.

62.

Organisation for Economic Co-operation and Development. (2011). Pensions at a glance 2011: Retirement-income systems in OECD and G20 countries. Paris, France: Author.

63.

Peracchi

Welch

(1994). Trends in labor force transitions of older men and women. Journal of Labor Economics, 12, 210-242.

64.

Perry

J. L.

Engbers

T. A.

Jun

S. Y.

(2009). Back to the future? Performance-related pay, empirical research, and the perils of persistence. Public Administration Review, 69, 39-51.

65.

Perry

J. L.

Rainey

H. G.

(1988). The public-private distinction in organization theory: A critique and research strategy. Academy of Management Review, 13, 182-201.

66.

Pond

S. B.

Geyer

P. D.

(1991). Differences in the relation between job satisfaction and perceived work alternatives among older and younger blue-collar workers. Journal of Vocational Behavior, 39, 251-262.

67.

Quinn

J. F.

Burkhauser

R. V.

(1990). Work and retirement. In Binstock

B.H.

George

L.K.

(Eds.), Handbook of aging and the social sciences (3rd ed., pp. 307-327). New York, NY: Academic Press.

68.

Rainey

H. G.

(1982). Reward preferences among public and private managers: In search of the service ethic. American Review of Public Administration, 16, 288-302.

69.

Rainey

H. G.

(1983). Public agencies and private firms: Incentive structures, goals, and individual roles. Administration & Society, 15, 207-242.

70.

Rainey

H. G.

Bozeman

(2000). Comparing public and private organizations: Empirical research and the power of the a priori. Journal of Public Administration Research and Theory, 10, 447-470.

71.

Rainey

H. G.

Chun

Y. H.

(2005). Public and private management compared. In Ferlie

Lynn

L. E.

Pollitt

(Eds.), The Oxford handbook of public management (pp. 72-102). Oxford, UK: Oxford University Press.

72.

Rainey

H. G.

Traut

Blunt

(1986). Reward expectancies and other work-related attitudes in public and private organizations: A review and extension. Review of Public Personnel Administration, 6, 50-72.

73.

Ruhm

C. J.

(1989). Why older Americans stop working. The Gerontologist, 29, 294-299.

74.

Schmidt

J. A.

Lee

(2008). Voluntary retirement and organizational turnover intentions: The differential associations with work and non-work commitment constructs. Journal of Business and Psychology, 22, 297-309.

75.

Schneider

Goldsstein

H. W.

Smith

D. B.

(1995). The ASA framework: An update. Personnel Psychology, 48, 747-773.

76.

Settersten

R. A.

Hagestad

Jr. (1996). What’s the latest? Cultural age deadlines for educational and work transitions. The Gerontologist, 36, 602-613.

77.

Shultz

K. S.

Morton

K. R.

Weckerle

J. R.

(1998). The influence of push and pull factors on voluntary and involuntary early retirees’ retirement decision and adjustment. Journal of Vocational Behavior, 53, 45-57.

78.

Shultz

K. S.

Wang

(2007). The influence of specific physical health conditions on retirement decisions. The International Journal of Aging and Human Development, 65, 149-161.

79.

Solomon

E. E.

(1986). Private and public sector managers: An empirical investigation of job characteristics and organizational climate. Journal of Applied Psychology, 71, 248-259.

80.

Steijn

(2008). Person-environment fit and public service motivation. International Public Management Journal, 11(1), 13-17.

81.

Toosi

(2006, November). A new look at long term labor force projections to 2050. Monthly Labor Review, pp. 19-39.

82.

Vandenabeele

(2008). Government calling: Public service motivation as an element in selecting government as an employer of choice. Public Administration, 86, 1089-1105.

83.

Van Loon

N. M

. (2017). Does context matter for the type of performance-related behavior of public service motivated employees? Review of Public Personnel Administration, 37, 405-429.

84.

Verquer

M. L.

Beehr

T. A.

Wagner

S. H.

(2003). A meta-analysis of relations between person-organization fit and work attitudes. Journal of Vocational Behavior, 63, 473-489.

85.

Wang

(2007). Profiling retirees in the retirement transition and adjustment process: Examining the longitudinal change patterns of retirees’ psychological well-being. Journal of Applied Psychology, 92, 455-474.

86.

Wang

Adams

G. A.

Beehr

T. A.

Shultz

K. S.

(2009). Career issues at the end of one’s career: Bridge employment and retirement. In Baugh

S. G.

Sullivan

S. E.

(Eds.), Maintaining focus, energy, and options through the life of span (pp. 135-162). Charlotte, NC: Information Age.

87.

Wang

Shi

(2014). Psychological research on retirement. Annual Review of Psychology, 65, 209-233.

88.

Wang

Shultz

(2010). Employee retirement: A review and recommendations for future investigation. Journal of Management, 36, 172-206.

89.

Wang

Zhan

Liu

Shultz

(2008). Antecedents of bridge employment: A longitudinal investigation. Journal of Applied Psychology, 93, 818-830.

90.

Wang

Y. D.

Yang

Wang

K. Y.

(2012). Comparing public and private employees’ job satisfaction and turnover. Public Personnel Management, 41, 557-573.

91.

Ward

K. D.

(2014). Cultivating public service motivation through AmeriCorps service: A longitudinal study. Public Administration Review, 74, 114-125.

92.

Wittmer

(1991). Serving the people or serving for pay: Reward preferences among government, hybrid sector, and business managers. Public Productivity & Management Review, 14, 369-383.

93.

Wright

B. E.

Christensen

R. K.

(2010). Public service motivation: A test of the job attraction-selection-attrition model. International Public Management Journal, 13, 155-176.

94.

Wright

B. E.

Grant

A. M.

(2010). Unanswered questions about public service motivation: Designing research to address key issues of emergence and effects. Public Administration Review, 70, 691-700.

95.

Wright

B. E.

Pandey

S. K.

(2008). Public service motivation and the assumption of person—Organization fit: Testing the mediating effect of value congruence. Administration & Society, 40, 502-521.