Friday, September 19, 2008
[IWS] CRS: OLDER WORKERS: EMPLOYMENT & RETIREMENT TRENDS [15 September 2008]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL30629
Older Workers: Employment and Retirement Trends
Updated September 15, 2008
Patrick Purcell, Specialist in Income Security, Domestic Social Policy Division
http://assets.opencrs.com/rpts/RL30629_20080915.pdf
[full-text, 19 pages]
Summary
As the members of the "baby boom" generation people born between 1946
and 1964 approach retirement, the demographic profile of the U.S. workforce will
undergo a substantial shift: a large number of older workers will be joined by
relatively few new entrants to the labor force. According to the Census Bureau,
while the number of people between the ages of 55 and 64 will grow by about 11
million between 2005 and 2025, the number of people who are 25 to 54 years old
will grow by only 5 million. This trend could affect economic growth because labor
force participation begins to fall after age 55. In 2007, 91% of men and 75% of
women aged 25 to 54 participated in the labor force. In contrast, just 70% of men
and 58% of women aged 55 to 64 were either working or looking for work in 2007.
The rate of employment among persons age 55 and older is influenced by
general economic conditions, eligibility for Social Security benefits, the availability
of health insurance, and the prevalence and design of employer-sponsored pensions.
Labor force participation among people 55 and older may, for example, be affected
both by the trend away from defined-benefit pension plans that offer a monthly
annuity for life to defined contribution plans that typically pay a lump-sum benefit.
The declining percentage of employers that offer retiree health insurance also may
result in more people continuing to work until they are eligible for Medicare at 65.
Census Bureau data show that the percentage of men and women age 62 and
older who work in paid employment has risen over the past several years. In March
2008, 52% of men aged 62 to 64 were employed, compared with 43% in 1995 and
42% in 1990. Of men aged 65 to 69, 33% were employed in March 2008, compared
with 27% in 1995 and 26% in 1990. Among women 62 to 64 years old, 41% were
working in March 2008, compared with 32% in 1995 and 28% in 1990, whereas
among women 65 to 69 years old, 27% were working in March 2008, compared with
17% in 1995 and 1990. There also has been a trend toward more full-time
employment among older Americans who work. In March 2008, 82% of employed
men aged 62 to 64 were working full-time, compared with 77% in 1995 and 1990.
Seventy-two percent of men aged 65 to 69 who were working in March 2008 were
employed full-time, compared with 57% in 1995 and 56% in 1990. Among working
women aged 62 to 64, 65% worked full-time in March 2008, compared with 60% in
both 1995 and 1990, whereas among working women aged 65 to 69, 55% were
employed full-time in March 2008, compared with 43% in 1995 and 44% in 1990.
As more workers reach retirement age, employers may try to induce some of
them to remain on the job, perhaps on a part-time basis. This is sometimes referred
to as "phased retirement." Several approaches to phased retirement job sharing,
reduced work schedules, and rehiring retired workers on a part-time or temporary
basis can be accommodated under current law. The Pension Protection Act of
2006 (P.L. 109-280) allows pension plans to begin paying benefits to workers who
have not yet separated from their employers at the earlier of age 62 or the pension
plan's normal retirement age, which in most plans is 65. Some employers would like
to be able to pay partial pension distributions to workers who have reached the
pension plan's early retirement age. This would require a change in federal law.
Contents
The Aging of the Labor Force: 2005 to 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Long-Term Trends in Labor Force Participation Rates . . . . . . . . . . . . . . . . . . . . . 3
Recent Employment Trends Among People Aged 55 and Older . . . . . . . . . . . . . . 5
Retirement Income Among Older Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Employment Among Recipients of Retirement Income . . . . . . . . . . . . . . . . 9
Social Security Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Age When Benefits Begin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Retired Worked Beneficiaries as a Percentage of Each Age Category . . . . 12
Older Workers and "Phased Retirement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Current Approaches to Phased Retirement . . . . . . . . . . . . . . . . . . . . . . . . . 14
Phased Retirement and Pension Distributions . . . . . . . . . . . . . . . . . . . 14
Distributions from 401(k) Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Tables
Table 1. U.S. Population Age 25 and Older, 2005 and 2025 . . . . . . . . . . . . . . . . 2
Table 2. Labor Force Participation Rates, 1950 to 2007 . . . . . . . . . . . . . . . . . . . . 4
Table 3. Employment of Men Aged 55 and Older, 1990 to 2008 . . . . . . . . . . . . . 6
Table 4. Employment of Women Aged 55 and Older, 1990 to 2008 . . . . . . . . . . 7
Table 5. Receipt of Income from Employer Pensions and Retirement Savings Plans . . . .. . . . . . . . . 9
Table 6. Employment of Recipients of Employer Pensions and Retirement Savings Plans . . . . . . . 10
Table 7. Social Security Retired Worker Benefit Awards, by Age . . . . . . . . . . . 12
Table 8. Social Security Retired Worker Beneficiaries, by Age . . . . . . . . . . . . . 13
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL30629
Older Workers: Employment and Retirement Trends
Updated September 15, 2008
Patrick Purcell, Specialist in Income Security, Domestic Social Policy Division
http://assets.opencrs.com/rpts/RL30629_20080915.pdf
[full-text, 19 pages]
Summary
As the members of the "baby boom" generation people born between 1946
and 1964 approach retirement, the demographic profile of the U.S. workforce will
undergo a substantial shift: a large number of older workers will be joined by
relatively few new entrants to the labor force. According to the Census Bureau,
while the number of people between the ages of 55 and 64 will grow by about 11
million between 2005 and 2025, the number of people who are 25 to 54 years old
will grow by only 5 million. This trend could affect economic growth because labor
force participation begins to fall after age 55. In 2007, 91% of men and 75% of
women aged 25 to 54 participated in the labor force. In contrast, just 70% of men
and 58% of women aged 55 to 64 were either working or looking for work in 2007.
The rate of employment among persons age 55 and older is influenced by
general economic conditions, eligibility for Social Security benefits, the availability
of health insurance, and the prevalence and design of employer-sponsored pensions.
Labor force participation among people 55 and older may, for example, be affected
both by the trend away from defined-benefit pension plans that offer a monthly
annuity for life to defined contribution plans that typically pay a lump-sum benefit.
The declining percentage of employers that offer retiree health insurance also may
result in more people continuing to work until they are eligible for Medicare at 65.
Census Bureau data show that the percentage of men and women age 62 and
older who work in paid employment has risen over the past several years. In March
2008, 52% of men aged 62 to 64 were employed, compared with 43% in 1995 and
42% in 1990. Of men aged 65 to 69, 33% were employed in March 2008, compared
with 27% in 1995 and 26% in 1990. Among women 62 to 64 years old, 41% were
working in March 2008, compared with 32% in 1995 and 28% in 1990, whereas
among women 65 to 69 years old, 27% were working in March 2008, compared with
17% in 1995 and 1990. There also has been a trend toward more full-time
employment among older Americans who work. In March 2008, 82% of employed
men aged 62 to 64 were working full-time, compared with 77% in 1995 and 1990.
Seventy-two percent of men aged 65 to 69 who were working in March 2008 were
employed full-time, compared with 57% in 1995 and 56% in 1990. Among working
women aged 62 to 64, 65% worked full-time in March 2008, compared with 60% in
both 1995 and 1990, whereas among working women aged 65 to 69, 55% were
employed full-time in March 2008, compared with 43% in 1995 and 44% in 1990.
As more workers reach retirement age, employers may try to induce some of
them to remain on the job, perhaps on a part-time basis. This is sometimes referred
to as "phased retirement." Several approaches to phased retirement job sharing,
reduced work schedules, and rehiring retired workers on a part-time or temporary
basis can be accommodated under current law. The Pension Protection Act of
2006 (P.L. 109-280) allows pension plans to begin paying benefits to workers who
have not yet separated from their employers at the earlier of age 62 or the pension
plan's normal retirement age, which in most plans is 65. Some employers would like
to be able to pay partial pension distributions to workers who have reached the
pension plan's early retirement age. This would require a change in federal law.
Contents
The Aging of the Labor Force: 2005 to 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Long-Term Trends in Labor Force Participation Rates . . . . . . . . . . . . . . . . . . . . . 3
Recent Employment Trends Among People Aged 55 and Older . . . . . . . . . . . . . . 5
Retirement Income Among Older Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Employment Among Recipients of Retirement Income . . . . . . . . . . . . . . . . 9
Social Security Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Age When Benefits Begin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Retired Worked Beneficiaries as a Percentage of Each Age Category . . . . 12
Older Workers and "Phased Retirement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Current Approaches to Phased Retirement . . . . . . . . . . . . . . . . . . . . . . . . . 14
Phased Retirement and Pension Distributions . . . . . . . . . . . . . . . . . . . 14
Distributions from 401(k) Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Tables
Table 1. U.S. Population Age 25 and Older, 2005 and 2025 . . . . . . . . . . . . . . . . 2
Table 2. Labor Force Participation Rates, 1950 to 2007 . . . . . . . . . . . . . . . . . . . . 4
Table 3. Employment of Men Aged 55 and Older, 1990 to 2008 . . . . . . . . . . . . . 6
Table 4. Employment of Women Aged 55 and Older, 1990 to 2008 . . . . . . . . . . 7
Table 5. Receipt of Income from Employer Pensions and Retirement Savings Plans . . . .. . . . . . . . . 9
Table 6. Employment of Recipients of Employer Pensions and Retirement Savings Plans . . . . . . . 10
Table 7. Social Security Retired Worker Benefit Awards, by Age . . . . . . . . . . . 12
Table 8. Social Security Retired Worker Beneficiaries, by Age . . . . . . . . . . . . . 13
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 8:39 AM
