By Raquel Justo, Adrian Merida & Juan A. Sanchis-Llopis

Understanding the drivers of early retirement is increasingly important in the context of aging populations and growing concerns over pension sustainability. While extensive research has examined the retirement behavior of paid employees, the self-employed, who operate under distinct work arrangements and institutional contexts, remain comparatively understudied. This work examines whether job satisfaction influences actual retirement behavior differently for self-employed individuals and paid employees. Leveraging longitudinal data from the Survey of Health, Ageing and Retirement in Europe (SHARE), which allows us to observe early retirement transitions among over 11,000 individuals across 11 countries, we first confirm that self-employed individuals have a substantially lower probability of early retirement than paid employees. Importantly, our findings also suggest that the established negative association between job satisfaction and early retirement holds robustly for paid employees but is negligible among the self-employed. We further provide suggestive evidence that this divergence is driven by the joint influence of greater autonomy, deeper selfrealization through work, and larger financial barriers to exit among the selfemployed. Our findings emphasize the need for differentiated retirement policies that reflect the heterogeneity of retirement determinants across employment types.

Source SSRN