Labor-Force Participation Rates of the Population Age 55 and Older, 2011: After the Economic Downturn

Abstract:     
This paper examines the most recent U.S. Census Bureau data on labor-force participation among Americans age 55 and older in 2011, including the trends after the economic recession that started in late 2007-early 2008 and thereafter. The labor-force participation rate measures the fraction of individuals within a specific group (in this case those 55 or older) who are working or actively pursuing work. This rate reflects both the desire and/or the need of individuals to work in a particular group. The first section uses annualized data on labor-force participation from the Current Population Survey (CPS), available from the Bureau of Labor Statistics website. However, these data provide only an overall picture, with few specific demographic details. In order to examine additional demographic trends of the U.S. population, the second section uses data from the March 2011 Supplement to the CPS. The labor-force participation rate for those age 55 and older has remained above its level before the economic downturn. For those ages 55-64, this is almost exclusively due to the increase of women in the work force; the male participation rate is flat to declining. However, among those age 65 and older, labor-force participation increased for both males and females. This upward trend is not surprising and is likely to continue because of workers’ need for continued access to employment-based health insurance and for more earning years to accumulate savings in defined contribution (401(k)-type) plans. Older Americans, particularly those in the private sector, increasingly have less access to guaranteed levels of income (such as pensions) or health insurance benefits when they retire; consequently, they have a greater need to work to help make their assets last longer or to continue to build up (or to rebuild) the assets they had or were not able to accumulate previously. However, financial concerns are not the only incentives involved here -- there also is an increased desire among many Americans to work longer, particularly among those with more education, for whom more meaningful jobs are often available that can be done well into older ages. The recent economic downturn did not alter the trend of older workers increasingly being in the labor force; rather, it appears that this remains the trend, as more opportunities for older workers exist and there is a greater necessity for them to remain in the labor force to accumulate sufficient or adequate resources for retirement.

The PDF for the above title, published in the February 2012 issue of EBRI Notes, also contains the fulltext of another February 2012 EBRI Notes article abstracted on SSRN: “Employer and Worker Contributions to Health Savings Accounts and Health Reimbursement Arrangements, 2006-2011.”

Number of Pages in PDF File: 20

Keywords: Aged, Demographics, Employment, Labor force participation, Recession

JEL Classification: J14, J15, J16, J21, J26, J33

Accepted Paper Series