Factors influencing the likelihood of retirement: Evidence from South Africa
Owing to advances made in medicine and science, recent trends have shown an unprecedented increase in the average life expectancy of humans. The increased life longevity, compounded by inadequate financial planning and an increased strain on pension systems, has increased old-age poverty. This paper plans to extend prior research by investigating whether factors that influence pre-retirement behaviour mirror reality when it comes to retirement decisions. Using baseline survey responses from 1,926 individuals between the ages of 60 and 105 obtained from the HAALSI study conducted in Agincourt (South Africa), a probit model was estimated to investigate whether various demographic and self-reported measures influenced the likelihood of being retired. The results indicated that, in addition to demographic covariates, certain ratings of self-reported health, memory, and perceived life longevity had a significant influence on the likelihood of being retired. Whereas self-reported measures of belongingness and HIV status were not influential predictors. Therefore, the findings indicate that in addition to re-structuring pension systems in response to changes in life longevity, behavioural policies should be implemented to ensure that more elderly can comfortably retire in the developing world.
Faculteit der Managementwetenschappen