Early Retirement in the Day-Care Sector: The Role of Working Conditions

This paper studies the role of working conditions and health for elderly female day-care teachers’ decision to enter early retirement pay (ERP). Entry into retirement is analysed in a duration framework that allows for unobserved heterogeneity in the baseline hazard. Data are from a Danish longitudinal data set based on administrative register records for 1997-2006 with information on labour-market career, family background, health-care utilisation and employment status of a spouse. Work pressure is measured by the child-to-teacher ratio, which varies across municipalities and over time. Regressions in a duration model framework show that the child-to-teacher ratio has a small and significant effect on retirement after 2002 for preschool teachers with poor health. For preschool teachers with good or average health status and for nursery-care teachers in general, there is no significant relationship between the child-to-teacher ratio and early retirement (ERP). Day-care teachers whose spouses are retired or who have grandchildren have a significantly higher probability of choosing early retirement.