STUMP » Articles » Labor force participation rates, part 3: Older folks (55 and up) » 1 July 2014, 01:07

Where Stu & MP spout off about everything.

Labor force participation rates, part 3: Older folks (55 and up)  

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1 July 2014, 01:07

We’ve looked at prime working ages (25-54) and younger ages. The results so far: prime working years have a very long-term trend that swamps out recent short-term movements for both men and women; younger ages have seen dramatic decreases in labor force participation rates in the past 5 years.

Now let’s look at the older folks. I am including the 50-54 age grouping for comparison.

Women:

Men:

The main long-term trends are that for older ages, women have been increasing their labor force participation rates, and it’s not clear that they’ve yet plateaued for the over age 55 grouping. For men, something interesting: it looks like for older ages (over age 60), they bottomed out sometime during the 1990s and have been increasing since then. FWIW, I had looked at labor force participation rates for men back in the 1950s-1960s, and yes, back then the labor force participation rate for those older than 65 was higher than in the 1990s.

People forget that “traditional” pensions are not all that traditional. Back in the 1950s/1960s, a lot of men had no pensions at all – not only no defined benefit pensions (because I think at most 30% of the male working population had DB pensions at their peak), but neither IRAs nor 401(k)s existed back then. The men worked until they died, and many died in their 60s.

What about these age groupings? Why are they split this way?

First, the 60-64 age range was split up from 60-61 and 62-64 because of eligibility for Social Security Old Age benefits at age 62. A lot of people take their benefits as early as possible.

Thing is, it’s pretty clear people currently are retiring well before age 62 (I know my own mother did). Let’s look at the differences in labor force participation rate between different age groupings. I took differences between the adjacent age groupings and it gives you an idea of when people are retiring.

Because I’m looking at differences, I will force the vertical scale to have its minimum at 0, but let the top of the axis float. We’re really wanting to see where the retirements are occurring.

Women:

Men:

So we’re seeing more and more women retiring at older ages – not so many retiring in their 50s, most retiring later in their 60s. I didn’t make the comparison at age 70-74, because my data didn’t go all the way back to the 1970s for that info.

For men, the pattern is more complicated. During the 1980s/1990s, we see a lot of men retiring around age 62, when they became eligible for Social Security Old Age benefits. Now more are waiting til at least age 65.

In the next post, we will look at the young vs. the old to see the recent shift.


Related Posts
Labor force participation rates, part 5: the Gender Gap
Labor force participation rates, part 4: Old v. Young
Stat Crunching: Labor Force Participation Rate Trends, Prime Working Years