Baby Boomers Reverse Work Trends
Boomers Reverse Working Trends
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 reversed.
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.
Clearly, something has changed about people’s attitudes toward retirement. A survey from the Federal Reserve last week provided some clues. 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 – working full-time in a career until ceasing work altogether – 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.
Baby Boomers Reverse Work Trends
This might sound like a paradox. How can the falling labor force be the result of aging, if old people are increasingly likely to work?
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.
This chart’s downward slope shows fewer men working at every age. But, 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 ago.
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