Executive summary

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This study documents employment patterns over the subsequent 10 years of workers who left a long-term job (at least 12 consecutive years) in paid employment at age 50 or older in the late 1990s and early 2000s.

The analysis is based on an administrative panel dataset, the Longitudinal Worker File. The study takes advantage of several features of this dataset: the 28-year panel frame; information on movement between employers and on earnings with the various employers; and the large sample size—a 10% random sample of workers in Canada.

Among workers who left a long-term job at ages 50 to 66, 33% of men and 27% of women were re-employed the same year, and among the rest, a further 27% of men and 24% of women were re-employed the following year. The probability of re-employment fell sharply thereafter. This pattern generally persisted when analysis was conducted by age at exit from the long-term job, reason for leaving, province of residence, and financial status.

The nature of re-employment among workers receiving only paid employment earnings during the subsequent decade (no unincorporated self-employment income) largely depended on their age when they left their long-term job. A large share who left in their early 50s appeared to continue their careers with sustained employment and comparable earnings over the reference period. The likelihood of re-employment fell at older ages, and median earnings relative to earnings in the long-term job were much lower.

The probability of having low or high relative (to the long-term job) earnings in re-employment was associated with factors such as the reason for leaving, the presence of a registered pension plan with the long-term employer, marital status, and province of residence.

A large share of workers who left long-term employment as paid employees reported income from unincorporated self-employment at some point during the subsequent 10 years. Entry into self-employment was less concentrated in the first two years after leaving the long-term job than was paid employment. Two-thirds of workers with earnings from unincorporated self-employment also reported earnings from paid employment during the reference period. Net self-employment earnings were modest, compared with earnings from the long-term job.

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