How long baby boomers remain in the labor force will help shape the economic consequences of an aging population. Population aging poses economic and fiscal challenges as the ratio of working taxpayers to older benefit recipients decreases. However, the economy could produce more goods and services if boomers worked longer, boosting living standards for workers and generating additional tax revenue to fund promised benefits for retirees and other government programs.
There are a number of reasons to believe that boomers will want to work longer. Health improvements and the declining prevalence of physically demanding jobs have made work at older ages more feasible for many people. Lower Social Security replacement rates and the trend away from traditional pensions and employer-provided retiree health insurance have made early retirement less affordable and increased the returns from additional years of work. Surveys suggest that boomers are increasingly concerned about their ability to afford retirement and that most intend to work in retirement (MetLife Mature Market Institute 2005 and AARP 2003).
Even if boomers are willing to work longer, however, their opportunities will be limited if employers are unwilling to hire or retain them. Employers often say they value older workers’ experience, maturity, and strong work ethic, but some express concern about their higher salaries and benefit costs, combined in the view of some with declining abilities or out-of-date skills. This report examines the current employer demand for older workers and explores how demand may be changing over time. It begins by displaying the occupations at which older workers are most likely to be employed today. The report then discusses the personal and social benefits of increased work by older adults and the reasons why boomers are likely to try to work longer than earlier generations. Later sections of the report examine whether employers will want older workers and how changes in the nature of work, demands for different occupations, the characteristics of older workers, and overall labor force growth will affect the future demand for older workers. The report concludes with some policy recommendations.
What are your thoughts, are employers arms wide open? or is it all talk and no real action?