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Labor force participation and the characteristics of older American workers (aged 55 and over) have changed a great deal since the mid-1930s, reflecting changes in the broader labor force. No longer are men the sole supporters of their families, working in jobs that require physical labor and expecting to fully retire by age 65. During and after World War II, women surged into the labor force. Health and life expectancy have increased, especially for more educated workers. More recently, older workers considering retirement are facing a tough economic climate in the wake of the Great Recession. Many have experienced reductions in compensation and job losses during this period. These changes coupled with declining home values, investment losses, and high debt have undermined retirement plans and expectations. As a result, older workers are increasingly postponing retirement, or returning to the labor force after initially retiring. The literature review examines supply- and demand-side factors that affect older workers’ 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. This literature review informs policymakers about the current state of research in this area, emphasizing research conducted from 2010 to 2015. It synthesizes the recent research and highlights the research gaps that remain. The focus is on workforce behaviors among older workers, the barriers they face in the workplace, and the policies and programs that may help them and improve their labor market outcomes. The research review presented is intended to be useful to government agencies that support older workers in crafting effective policies directed toward these workers.

Key Takeaways

• Older workers across all age groups are increasingly present in the workforce (1994– 2014), and their presence is expected to increase over the next decade (2014–2024).
• Career transitions after age 50 have become increasingly common in recent years, and many older workers have had success in making those transitions, particularly when they can leverage skills and qualifications they already have to land new career jobs.
• Older workers had noticeably lower rates of job loss than their younger counterparts in 1996, but that relationship had reversed by 2006.
• The public workforce system in the United States has served, and continues to serve, as an important tool in mitigating the effects of temporary job loss. However, research indicates that older workers need more, and better targeted, assistance than they currently receive.
• A wide range of research indicates that reductions in Social Security benefits would induce older individuals to work more hours in retirement, even those well into their 70s and 80s.
• Medicare eligibility (which begins at age 65) is important in explaining why workers continue to retire at 65, even though entitlement for full Social Security benefits comes only at age 67.

Research Gaps

• We suggest research to examine how paid leave benefits are used and perceived among workers with service, blue-collar, and white-collar jobs. In order to dig deeper into the employer perspective, it would also be valuable to interview employer associations and human resource professional associations (e.g., California Employers Association, and Society of Human Resource Management) to assess their level of awareness, gather information about the education of business professionals (owners, human resource professionals, etc.) on paid leave, as well as to gain further information about the dissemination of leave taking information. (pages 79-82)

Citation

Agbayani, C., Gasperini, B., Moore, J., Nanda, N., Patterson, L., Wandner, S. (2016). IMPAQ International. Labor Market and DOL-Funded Employment Assistance for Older Workers: Literature Review Report. Chief Evaluation Office, U.S. Department of Labor.

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The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.