What Explains Trends in Labor Force Participation of Older Men in the United States?

54 Pages Posted: 6 Sep 2007

See all articles by David M. Blau

David M. Blau

University of North Carolina (UNC) at Chapel Hill - Department of Economics; IZA Institute of Labor Economics

Ryan Goodstein

University of North Carolina (UNC) at Chapel Hill

Date Written: August 2007

Abstract

After nearly a full century of decline, the Labor Force Participation Rate (LFPR) of older men in the United States leveled off in the 1980s, and began to increase in the late 1990s. We use a time series of cross sections from 1962 to 2005 to model the LFPR of men aged 55-69, with the aim of explaining these trends. We investigate the effects of changes in Social Security rules, lifetime earnings, pension coverage, wages, health, health insurance, and the educational composition of the labor force. Our results indicate that the decline in the LFPR from the 1960s through the 1980s cannot be explained by any of these factors. The recent increase in the LFPR of older men can be explained by changes in the composition of the older male population away from high school dropouts and toward college attendees and graduates. Changes in Social Security may have contributed to the recent increase as well, but the results for Social Security are sensitive to specification.

Keywords: labor force participation, retirement, social security, pensions

JEL Classification: J26, J21

Suggested Citation

Blau, David M. and Goodstein, Ryan, What Explains Trends in Labor Force Participation of Older Men in the United States? (August 2007). IZA Discussion Paper No. 2991, Available at SSRN: https://ssrn.com/abstract=1012545

David M. Blau (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Gardner Hall
Chapel Hill, NC 27599
United States
919-966-3962 (Phone)
919-966-4986 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ryan Goodstein

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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