Aging and Labor Force Participation: A Review of Trends and Explanations

72 Pages Posted: 25 May 2006 Last revised: 10 Jun 2007

See all articles by David A. Wise

David A. Wise

National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Robin L. Lumsdaine

American University - Department of Finance and Real Estate; Erasmus University Rotterdam (EUR) - Department of Econometrics; National Bureau of Economic Research (NBER)

Date Written: August 1990

Abstract

The American population is aging rapidly. Persons 65 and over who now constitute about one-fifth of the population will constitute about two-fifths of the population by 2040. In addition, individuals are living longer. Yet the labor force participation of older Americans has fallen dramatically in recent years. This paper discusses this trend and the principal arguments put forth to explain it. The paper is in two parts. The first part reviews trends in labor force participation and associated trends in Social Security (SS) coverage, firm pension plan coverage, and other factors that are likely to be associated with the labor force participation trends, including demographics. The second part of the paper discusses the incentive effects of SS and retirement plans, with emphasis on firm pension plans.

Suggested Citation

Wise, David A. and Lumsdaine, Robin L., Aging and Labor Force Participation: A Review of Trends and Explanations (August 1990). NBER Working Paper No. w3420. Available at SSRN: https://ssrn.com/abstract=226696

David A. Wise (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Harvard Kennedy School (HKS)

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Robin L. Lumsdaine

American University - Department of Finance and Real Estate ( email )

Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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