One of the biggest changes in the U.S. labor market over the
past two decades has been the increasing number of people working over the age
of 55. From the end of World War II until the early 1990s, a smaller and
smaller share remained in the labor force but since the 1990s that trend
In 1993, only 29% of people that age were in the labor
force. The vast majority were retired. But participation has been rising and by
2012 more than 41% of that age group were still in the labor force, the highest
since the early 1960s
A survey from the Federal Reserve last week provided
some clues on the change that triggered people’s attitudes toward retirement.
Around 21% of people said their plan for retirement is simply “to work as long
as possible” and the number of people giving this response increases by age. Conversely,
the traditional way to retire is the plan for 35% of people in their 20s. But
by the time they reach their 60s, only 15% say it will be their route.
For at least some Americans, the rise in labor force
participation at old age signals that retirement is simply out of reach. Surveys
from Gallup have found that people who believe they can afford to retire
generally tend to do so the earliest. The wealthy businessmen or distinguished
town doctors who are in good health and just enjoy their work too much to ever
step aside are the exception, not the rule.
The rising participation of the old is an exception to the
overall trends in the U.S. labor force. For the past decade, labor force
participation has declined in the U.S, and much of the decline has
been attributed to the retirement of the Baby Boomer generation: children born
in the years after World War II began turning 55 in the year 2000.
The Department of Labor has some little-seen data showing
the participation rate by age that helps makes clear why these two trends are
not necessarily a contradiction. At any given age, more men are working in the
year 2013 than were in 2000. At the turn of the century, for example, about 66%
of 60-year-old men and 20% of 70 year old men were still in the labor force.
Today, that’s risen to 72% and 25% respectively. The trend is also true for
women. At every age, women are more likely to work than they were just 13 years
But people are still retiring. Every birthday after 55 sees
fewer and fewer men and women in the labor force. The oldest Baby Boomers are
now nearing 70 when 20% of women and 25% of men work. Among 55-year-old
Boomers, 70% of women and 80% of men work.
So both labor force trends are true. The massive Baby Boomer
generation is moving through retirement and contributing to the decline in the
national labor force participation rate, even though people are now working
longer in old age.
here to access the full article on The Wall Street Journal.