Working Beyond Retirement-Age Kelly A. Holder and Sandra L. Clark U.S. Census Bureau Housing and Household Economics Division Labor Force Statistics Branch Presented at the American Sociological Association Annual Conference in Boston, MA on August 2, 2008. 1
According to U.S. Census Bureau population projections, 20.7% of the population will be 65 years or older by 2050. 25.0 20.0 20.7% Percent 15.0 10.0 12.4% 5.0 0.0 2000 2010 2020 2030 2040 2050 Source: U.S. Census Bureau, U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin (2004) 2
The Bureau of Labor Statistics projects the labor force participation rates for the population 65 years and older will increase through 2014. 30 25 26.9% 20 19.7% Percent 15 65 to 74 years 65 years and older 10 9.6% 5 75 years and older 0 1984 1994 2004 2014 Source: Bureau of Labor Statistics, Labor force projections to 2014: retiring boomers (2005) 3
About 15 percent of people over the traditional retirement age were still in the labor force in 2006. 28.9% 14.5% 16.3% 5.5% 65 years and older 65 to 69 years 70 to 74 years 75 years and older 4
Why might people be working beyond retirement-age? High cost of health insurance & decline in employer retiree health benefits More years will be spent in retirement as life expectancy increases Lower rates of traditional defined-benefit pension coverage Desire to accumulate more Social Security or other retirement savings wealth Improve emotional well-being and physical health by remaining active Work promotes social integration and social support (Source: The Urban Institute, The Retirement Project, 2006) 5
About the Data Data (ACS) The dataset consists of weighted estimates representing 37.2 million people aged 65 and older, of which 5.4 million were workers. DEFINITIONS: Older Workers = 65 years and older Younger Workers = 16 to 64 years old Retirement-age = 65 years and older Workers = people who are either employed or unemployed Nonworkers = people no longer part of the labor force 6
Retirement-Age Population The following slides show the characteristics of workers and nonworkers 65 years and older. 7
Over half of all older workers were men. Most older workers were between the ages of 65 and 69 years. (Percent distributions of sex and age by employment status) Workers Nonworkers 65 to 69 years 70 to 74 years 75 years and older 31.4 14.9 10.9 57.0 Male 9.9 9.5 19.9 39.4 24.5 10.9 7.6 43.0 Female 13.2 13.0 34.5 60.6 8
Older workers had higher educational attainment overall than older nonworkers. (Percent distributions of educational attainment by employment status) 35.1 29.2 30.6 24.0 Workers Nonworkers 18.9 15.6 14.5 15.2 9.9 6.9 Less than high school graduate High school graduate Some college or associate's degree Bachelor's degree Advanced degree The labor force participation rate for older workers with advanced degrees (27%) was about three times as high as the rate for older workers with less than a high school education (8%). 9
Workers were less likely to have any type of disability. (Percent distributions of disability status by employment status) Workers Nonworkers 80.8 47.5 52.5 19.2 Have a disability Have no disability 10
64% of older workers were married compared with 51% of older nonworkers. (Percent distributions of marital status by employment status) Older Workers Older Nonworkers Separated or Widowed 18% Separated or Widowed 35% Married 64% Divorced 14% Married 51% Divorced 9% Never Married 4% Never Married 5% 11
Me d ian Household Income The median income of households with at least one older worker was about $26,000 higher than that of households where everyone retirement-age or older did not work. (Median household income in 2006 inflation-adjusted dollars) Workers $56,692 Nonworkers $30,721 12
$0 to $49,999 $ 5 0,000to $99,999 $ 1 00,000to $ 1 9 9,9 9 9 $ 2 00,000to $ 3 9 9,9 9 9 $ 4 00,000to $ 7 4 9,9 9 9 $ 7 5 0,000o rmo re 50% of older workers who owned their properties carried a mortgage, compared with 30% of older nonworkers. Older workers also had higher property values than nonworkers. (Percent distributions of property values by employment status) $0 - $49,999 7.1 10.7 Workers Nonworkers $50,000 - $99,999 16.1 20.3 $100,000 - $199,999 28.5 29.2 $200,000 - $399,999 25.0 22.6 $400,000 - $749,999 15.4 12.7 $750,000 or more 4.5 8.0 13
The majority of the retirement-age population had some source of household income besides earnings at their disposal. Only 11% of workers and 4% of nonworkers reported no other source of income. 92.6 93.4 (Proportion of workers and nonworkers with some source of income by income type) Workers Nonworkers 38.8 40.9 33.4 32.3 6.1 9.5 5.2 1.0 0.4 1.3 Social Security or Railroad Retirement Interest, dividends, net rental, royalty, estate & trust Retirement, survivor, or disability pensions Other Supplemental Security Public assistance or welfare 14
Older Workers and Younger Workers The following slides show the characteristics of workers 65 years and older and workers age 16 to 64 years. 15
Older workers worked slightly fewer weeks per year and significantly less hours per week than younger workers. (Percent distributions of hours worked by age group) 50.9 78.9 65 years and older 16 to 64 years 34.4 15.7 13.3 3.3 Usually worked 35 or more hours per week Usually worked 15 to 34 hours per week Usually worked 1 to 14 hours per week Older workers may move from full-time work to part-time work to bridge the gap between career jobs and retirement. 16
The class of worker differed between the older and younger populations. 23% of older workers were self-employed compared with 10% of younger workers. (Percent distributions of class of worker by age group) Older Workers Unpaid family worker or unemployed 1% Government 13% Younger Workers Unpaid family worker or unemployed 1% Private 63% Private 75% Government 14% Selfemployed 23% Selfemployed 10% According to the Kauffman Foundation, Americans 55 to 64 years old form small businesses at a higher rate than any other age group. (The Kauffman Index of Entrepreneurial Activity, 1996-2004) 17
Older workers tend towards less physically-demanding industries and occupations. (Percent distributions of occupation by age group) Management, professional 34.3 32.6 Sales, office 25.6 29.4 Service 17.2 16.8 Production, transportation 12.1 13.2 Construction 5.4 10.2 Farming, fishing, forestry Military jobs or unemployed 0.9 0.7 0.6 0.9 65 years and older 16 to 64 years 18
The median personal earnings of older workers were $12,000 less than that of younger workers, while the median household incomes were only $2,000 less. (Median earnings & median income in 2006 inflation-adjusted dollars) Personal earnings $18,290 65 years and older 16 to 64 years $30,135 Household income $56,692 $58,206 While they may earn less than younger workers, 89% of workers 65 years and older have some other source of income, such as pensions and Social Security, compared with 22% of workers 16 to 64 years old. 19
Employment status of married-couples In couples where at least one person was 65 years or older and in the labor force, only 36% had both spouses in the labor force compared with 67% of younger couples. Older Couples Younger Couples Both spouses in labor force 36% Husband only in labor force 46% Both spouses in labor force 67% Husband only in labor force 27% Wife only in labor force 18% Wife only in labor force 6% 20
Work status of married-couples In half of the couples where at least one person was 65 years or older and in the labor force, both spouses worked less than year-round full-time compared with 16% of younger couples. Older Couples Younger Couples Both spouses worked less than YRFT 51% Husband only worked YRFT 27% Both spouses worked YRFT 10% Wife only worked YRFT 12% Both spouses worked less than YRFT 16% Wife only worked YRFT 9% Both spouses worked YRFT 33% Husband only worked YRFT 42% 21
Maps 22
Percentage of the population 16 years and older who are retirement-age Legend 8.6 to 12.6 12.7 to 16.7 16.8 to 20.9 23
Labor Force Participation Rates for the retirement-age population Legend 10.1 to 13.5 13.6 to 17.0 17.1 to 20.6 24
Ratio of older workers to older nonworkers median household income Legend 1.2 to 1.5 1.6 to 1.8 1.9 to 3.0 National 1.8 25
Summary of graphs WORKERS 65 years and older are more likely to be: Men More educated Married In better health Financially better-off Compared with NONWORKERS 65 years and older WORKERS 65 years and older are more likely to be: Part-time or part-year employees Self-employed In sales or management jobs In single-earner couples Compared with WORKERS 16 to 64 years old 26
Summary of Maps High Labor Force Participation Rates Agricultural states in the Great Plains Government-rich job market in District of Columbia Low Labor Force Participation Rates Traditional retirement states in the Sun Belt States that are actively recruiting retirees States that rank high on Best Places to Retire listings Median Household Income The largest disparities between median household incomes for workers and nonworkers are generally in southern states and states with high costs of living. 27
Contact Information U.S. Census Bureau Housing and Household Economic Statistics Division Labor Force Statistics Branch 301-763-3230 28