Does Having Grandchildren Persuade Women to Retire Early?

I am a grandmother. I don’t just admit it, I am proud of it. My first grandchild was born when I was fifty five, which is relatively young for American professional women, but I had four children by age 30. I also run an investment firm. You can imagine, then, how interested I might be in a study published last month called, “Retirement Timing of Women and the Role of Care Responsibilities for Grandchildren.”

Authors Lumsdaine and Vermeer analyzed longitudinal data from over 47,000 women and found that the arrival of a grandchild, holding all other factors constant, raises by 8.5% the likelihood that this woman will retire. That impact increases 1.5% with each additional grandchild. Of women 58-61 years old, the percent working full time was 43% for those with no grandchildren, 37% for grandmothers not caring for kids, and 29% for those who were caring for children. These dramatic differences were similar for the cohort in their early fifties.

While, as expected, women providing significant hours of childcare were more likely to be retired, when Lumsdaine and Vermeer analyzed the data, this was not a statistically significant factor that influenced women to seek retirement. Factors that did influence retirement were a fully vested pension and health insurance coverage. Higher income was also positively associated with retirement, as was poor health. Conversely, flexible work hours encouraged grandmothers to continue to work.

When I mentioned this study to my friend, MIT biology professor Susan Lindquist, she reminded me of the “Grandmother Hypothesis” which posits that the reason women outlive men is because there is an evolutionary advantage to having Grandma around to help care for the littlest generation. Studies of multiple cultures with short life spans show that populations are only able to sustain themselves if women beyond childbearing age are available to help care for the young children of their own offspring. Susan asserted that she herself would be “moorless” without work, but, as a biologist, she understands that grandmothers have been essential for human survival. That theory, while well documented, doesn’t answer the question of why and if well-educated, successful, professional women leave their hard-earned jobs once their own children are parents.

I thought about whether I had considered retiring after my first grandson was born. Both because I love my job and also because he was living across the Atlantic, I never seriously contemplated retiring. I did travel to Denmark at least every two months for over a year, often taking only a day off for a quick visit. If I was unable to do this, would I have retired? Perhaps, but I do have flexibility, in line with the study’s finding that flexibility keeps women in the workforce longer.

I asked my professional friends who have grandchildren how they feel about this issue. Although their numbers are small, none have chosen to retire. They all reported being grateful that their jobs allowed them the option of taking time to be with their grandchildren, or travel to vacation with them. Several mentioned that they are proud of the fact that they can help their grandchildren financially.

Job satisfaction probably plays a key role in their thinking.  Several high-ranking professional women I asked about this topic said that their job gives them great satisfaction and purpose. One friend told me she would feel “lost” without her role as a high ranking executive at an insurance company.

While the earnings effect is statistically significant as influencing women’s retirement decision, I asked Professor Lumsdaine whether they measured different ranges of income to discern changes in likelihood to retire as compensation increases. It is possible that the positive influence plateaus at a certain salary level and then possibly declines for women at high paying executive jobs. This paper did not examine that possibility, although the authors are continuing to analyze the data to understand trends among different cohorts of income, education, and job description.

If female executives do actually retire at a higher rate once they have grandchildren, it would be worth studying how professional women with grown children feel about their own familial role in the years when their children were young.  Women of my generation, particularly in business, often took very little time off as we moved through our careers. We juggled and balanced, scribbling out everyone’s schedules on airplane napkins to get one more household chore done before arriving home from a trip, often daydreaming of the ultimate nirvana; a twenty-six-hour day. These women may now feel, twenty-five or thirty years later, that they can recapture that time with their grandchildren what they never had with their own children.

The Lumsdaine and Vermeer paper suggests that flexibility policies for grandmothers may be a key component in keeping them in the work force, rather than policies that focus on increasing maternity leave or making childcare more accessible – two factors that had no impact on grandmothers’ likelihood of retiring. But since both maternity leave and childcare accessibility do affect mothers’ work satisfaction, perhaps increasing them will keep those women in the workforce years down the road, when they become grandmothers. After all, if young working mothers today do not find adequate time to be with their families, they may satisfy that desire to find out what they missed by retiring when their own children have offspring, repeating the cycle. Policy makers, therefore, should press on – for mothers and children of all ages.

Karen Firestone is the President and CEO of Aureus Asset Management, an asset management firm which serves as the primary financial advisor to families, individuals, and nonprofit institutions. She cofounded Aureus after 22 years as a fund manager and research analyst at Fidelity Investments. She’s the author of Evening the Odds: Reassessing Risk in Business, Investing, and Life (Bibliomotion, forthcoming April 2016).