The literature review presented in this report examines supply- and demand-side factors that affect older workers' (aged 55 and over) labor force participation and labor market outcomes more generally. Supply-side factors include individuals' socioeconomic and demographic characteristics, government assistance programs and Social Security benefits, and public workforce programs. Demand-side considerations comprise older workers' productivity and training, and employers' preferences and discrimination against older workers.

The review finds that labor force participation for older workers has increased over the past 20 years. Labor force participation among older individuals is related to the following factors:

• Rising educational attainment and better health status,
• Lower overall wealth and savings levels,
• Divorce, especially for women,
• Lower availability of defined benefit pension plans,
• Reforms that lower Social Security benefits (e.g., increases in the full retirement age),
• Changes in the availability of Social Security Disability Insurance and health insurance coverage,
• Lack of health insurance outside employer-sponsored coverage, and
• Factors associated with older workers leaving the labor force include lifestyle (sharing in retirement with a spouse), caregiving, and personal issues (e.g., health issues).

Labor demand studies indicate little difference in productivity by age. Worker productivity is less associated with age than with education and skills. Some work abilities decline with age, but these declining abilities may be offset by experience. Technology proficiency among older workers is not an area of research consensus. Although some studies observed that innovation is lower for firms with a higher share of older workers, other studies have found that (1) training older workers in the relevant technologies effectively reduced the observed decline in productivity with age, and (2) it is not the presence of older workers but the presence of untrained older workers that reduces firms' innovative capabilities. However, these studies are based primarily on datasets from countries in Europe.

Economic shocks and subsequent unemployment spells affect older workers more severely than younger workers. Older workers tend to return to work more slowly and find it more difficult to return to prior wage levels, among other issues. These shocks tend to accelerate the claiming of Social Security benefits. The public workforce underserves older workers in proportion to their representation in the labor force, though older workers who received services had some success at becoming employed.

Transitions to retirement have grown more complex. Retirement decisions are no longer a single, one-time event. Rather, retirement is a gradual transition out of the labor force including bridge employment, reentry, career transitions, and transitions to self-employment. The timing of retirement is affected by the availability of employer-provided defined benefit pension plans, employer-sponsored health insurance, and macroeconomic conditions.