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Are More Older Americans Working?

It is routinely reported that “10,000 Baby Boomers are retiring every day”, and yet surveys continue to indicate that Americans plan to postpone retirement.  
 
A recent Wall Street Journal article titled, “The Truth About Retirement for Baby Boomers,” notes that 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. As recently as 1993, only 29% of people that age were in the labor force, but by 2012 more than 41% of that age group were still in the labor force, the highest since the early 1960s.

Indeed, it’s hard to find a worker survey these days that doesn’t find workers planning to work past the traditional retirement age of 65. In fact, a recent survey by the Federal Reserve found that fewer than one-in-five workers age 55 to 64 planned to follow the traditional retirement model of working full time until a set date and then stop working altogether.

A recent report by the Employee Benefit Research Institute (EBRI) noted that the percentage of civilian, non-institutionalized Americans near or at retirement age (age 55 or older) in the labor force declined from 34.7 percent in 1975 to 29.4 percent in 1993. However, since then the overall labor-force participation rate of this group has steadily increased, reaching 40.5 percent in 2012—the highest level over the 1975–2013 period—before decreasing to 40.3 percent in 2013.

Venus and Mars?

The labor-force participation rate for men ages 55 and older followed the same pattern through 2010, falling from 49.4 percent in 1975 to 37.7 percent in 1993 before increasing to 46.4 percent in 2010, roughly where it stood in 2013. On the other hand, the labor-force participation rate of women in this age group was essentially flat from 1975 to 1993 (23.1 percent and 22.8 percent, respectively). But after 1993, the women’s rate also increased, reaching its highest level in 2010 (35.1 percent), where it remained though 2013.

The increase in labor-force participation for the age groups below age 65 was primarily driven by the increases in female labor-force participation rates, as the male labor-force participation rates of those ages 55–59 and 60–64 were lower in 2013 than they were in 1975. In contrast, female labor-force participation rates for those ages 55–59 and 60–64 increased sharply from 1975–2013, despite some leveling off in 2010–2013.

The WSJ article draws on some Department of Labor data that shows that while there are fewer men working at every age, at any given age, more men are working in the year 2013 than were in 2000. By way of example, the article notes that, at the turn of the century about 66% of 60-year-old men and 20% of 70 year old men were still in the labor force – participation that is today at 72% and 25%, respectively.

So, while there are clearly more people retiring, and thus more not working – there also appear to be more older individuals (on a percentage of workforce basis) working today – though perhaps not as many as once thought they might.