Labor Force Participation Rates: The Population Age 55 and Older, 2008

Abstract

This paper examines recent U.S. Census Bureau data on labor-force participation among Americans age 55 and older, which includes both the near elderly (ages 55-64) and the elderly (64 and above). The first section uses annualized data on labor-force participation from the Current Population Survey (available from the Bureau of Labor Statistics Web site). However, these data provide only an overall picture, not specific demographic details. In order to examine demographic trends of the U.S. population, the second section uses data from the March Current Population Survey (CPS). The percentage of civilian noninstitutionalized Americans age 55 or older who were in the labor force declined from 34.6 percent in 1975 to 29.4 percent in 1993. However, since 1993, the labor-force participation rate has steadily increased, reaching 39.4 percent in 2008 -- the highest level over the 1975-2008 period. For those ages 55-64 (the near elderly), this is being driven almost exclusively by the increase of women in the work force; the male participation rate is flat to declining. However, among those age 65 and older (the elderly), labor-force participation is increasing for both males and females. Education is a strong factor in an individual’s participation in the labor force at older ages: Individuals with higher levels of education are significantly more likely to be in the labor force than those with lower levels of education. This upward trend among the working near elderly and elderly is not surprising and is likely to continue because of workers’ need for access to employment-based health insurance and for more earning years to accumulate assets in defined contribution (401(k)-type) plans -- especially after the 2008 downturn in the stock market and economy. Many Americans also want to work longer, especially among those with more education.

The PDF for the above title, published in the February 2010 issue of EBRI Notes, also contains the full text of another February 2010 EBRI Notes article abstracted on SSRN: “Choice of Health Plan: Findings from the 2009 EBRI/MGA Consumer Engagement in Health Care Survey.”

Keywords: Aged, Demographics, Employment, Labor force participation

JEL Classification: J14, J21