Why Retire?

Our lives are a mix of work and play (= “liesure”). We tend to play more in the evenings, on weekends, holidays, and vacations, and at the start and end of our lives. Why this pattern of work vs. play?

We clearly like to put some play time close to work time, to avoid delaying gratification, and to get periodic rests from work. We also like to play at the same time as our friends and family. These factors go a long way toward explaining evenings, weekends, and holidays.

We also get some scale economies from periodic longer playtimes, which helps explain vacations; some sorts of play just don’t fit well in weekends. Humans and other animals were designed to learn important skills during childhood playtime, which helps explain our start of life play. (Most animals only play when young.)

Our habit of deferring so much play into the end of life, however, is a bit more puzzling. Our ancestors didn’t do this – it is a feature of our modern world. While encouraged by laws and regulations, the idea also just seems to appeal to many. But why, for example, doesn’t the idea of spreading a decade of play from age 65-75 across the four decades from age 25 to 65 appeal more? Why not want a week off every month, or two years off out of every eight?

Some say we play more when old because our work productivity declines then. And this makes complete sense in the extreme case when one isn’t able to work at all. But as Nick Rowe points out (HT Eric Crampton), before that extreme our ability to play and work decline together. And since our bodies decline faster than our minds, our capability for physically active play declines even faster than our ability to do mental work.

Asking my colleagues, most endorsed the view that we retire early because when our abilities decline, work abilities decline faster than play abilities. Yet this view doesn’t fit our short-term choices. When we are modestly under the weather, and can choose either to work with reduced productivity, or to play with reduced fun, most folks choose work over play. (I surveyed a class of 35 students.)

Once as a young man working at Lockheed, I decided to switch from working 40 to 30 hours per week, to spend more time on my independent research. My rate of advancement in the company didn’t just slow by 25%, it stopped completely — I was seen as not serious about my job. This suggests a signaling explanation for retirement: spreading our end of life play across the rest of our life would makes us look less serious and productive as workers.

Murray’s book Coming Apart emphasizes how there are many people with very poor work habits and motivation:

“What about the white guys on the corner.” … “The bums. … Those guys couldn’t work here, they can’t hold a job. …. They’re not motivated to work.” … “They’ll live on welfare or any other income they got coming in. They don’t want to work.” (p.217)

It seems that a willingness to put in lots of hours in midlife signals many other good things about you. So we send such signals, and then switch to play at the end of our lives, when it is too late for the bad signals to hurt us much. If real, this is a pretty big signaling cost we all pay, to seem like serious workers.