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The Effect of Local Labor Demand Conditions on the Labor Supply Outcomes of Older Americans

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Listed:
  • Nicole Maestas

    (RAND Corporation)

  • Kathleen Mullen

    (RAND Corporation)

  • David Powell

    (RAND Corporation)

Abstract

A vast literature in labor economics has studied the relationship between local labor demand shifts and the outcomes of the working age population. This literature has ignored the impacts that these shocks have on older individuals, though there are reasons to believe that the effects are not uniform by age. Using data from the Census and the Health and Retirement Study, we measure the effects of local labor demand conditions on a host of outcomes for older individuals including employment, retirement, Social Security claiming, wages, and job characteristics. We find that local labor demand conditions do affect the labor and retirement behavior of the older segment of the population, including Social Security claiming decisions. We also find evidence that older individuals are especially responsive to local labor demand shifts in the service industry, which we show has observably different job characteristics that may be especially attractive to older workers. Similarly, we find evidence that labor demand shocks not only increase the wages of older workers but also make the jobs more attractive on non-pecuniary dimensions.

Suggested Citation

  • Nicole Maestas & Kathleen Mullen & David Powell, 2013. "The Effect of Local Labor Demand Conditions on the Labor Supply Outcomes of Older Americans," Discussion Papers 13-014, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:13-014
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    1. Timothy J. Bartik, 2015. "How Effects of Local Labor Demand Shocks Vary with the Initial Local Unemployment Rate," Growth and Change, Wiley Blackwell, vol. 46(4), pages 529-557, December.
    2. Leora Friedberg & Michael T. Owyang & Wei Sun & Anthony Webb, 2017. "How Do Local Labor Markets Affect Retirement?," Review, Federal Reserve Bank of St. Louis, vol. 99(3), pages 259-278.
    3. Wolfgang Auer, 2018. "Empirical Essays on the Socioeconomic Consequences of Economic Uncertainty," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 79.
    4. Nicole Maestas & Kathleen J. Mullen & David Powell, 2023. "The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(2), pages 306-332, April.
    5. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2015. "The Great Recession, Retirement and Related Outcomes," NBER Working Papers 20960, National Bureau of Economic Research, Inc.
    6. Bilal Nabeel Falah & Marcelo Bérgolo & Arwa Abu Hashhash & Mohammad Hattawy & Iman Saadeh, 2019. "The Effect of Labor-Demand Shocks on Women’s Participation in the Labor Force: Evidence from Palestine," Working Papers PMMA 2019-08, PEP-PMMA.
    7. Meltzer, Rachel & Ghorbani, Pooya, 2017. "Does gentrification increase employment opportunities in low-income neighborhoods?," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 52-73.

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