August 17, 2009

People work for money, not love of the job

Many U.S. workers approaching retirement work for the money, not for love of the job, confirming that people prefer leisure than work, researchers found.

Jeffrey R. Brown and Scott Weisbenner of the University of Illinois said their study showed unexpected inheritances hasten retirement -- lending new credence to widely held economic theory that people value leisure time and will parlay newfound wealth into less work.

When unexpected wealth comes their way, a significant number respond by retiring early, not by continuing to work and buying a nice car or taking a vacation, Brown said in a statement. A negative shock to wealth has just the opposite effect of what we have in this study, so I expect that those losses are going to lead some people to work longer than they expected.

The study, scheduled to appear in the Review of Economics and Statistics, found that nearly one-quarter of workers who received a surprise or bigger-than-expected inheritance retired early, compared with 18 percent of total workers surveyed in the ongoing Health and Retirement Survey. The odds increased significantly as windfalls grew -- about 8 percent for every $100,000 inherited.