Why Do Boomers Plan to Work So Long?
Recent changes in retirement trends and patterns have raised questions about the likely retirement behavior of baby boomers, the large cohort born between 1946 and 1964. This study compares the retirement expectations of workers ages 51 to 56 in 2004 (who were born between 1948 and 1953, the leading edge of the baby boom) and 1992 (born between 1936 and 1941). Data come from the Health and Retirement Study. Work expectations increased significantly over the period. Between 1992 and 2004, the mean expected probability of working full-time past age 62 among workers ages 51 to 56 increased from 47 percent to 51 percent. The increase was even more rapid for the expected mean probability of full-time work after age 65, which grew from 27 percent to about 33 percent over the period. Controlling for other factors, self employment, education, and earnings increased work expectations at older ages, while defined benefit pension coverage, employer-sponsored retiree health benefits, and household wealth reduced expectations. Lower rates of retiree health insurance offers from employers, higher levels of educational attainment, and lower rates of defined benefit pension coverage accounted for most of the increase between 1992 and 2004 in expected work probabilities after ages 62 and 65. These trends suggest that the boomers will remain at work longer than the previous generation. The recent uptick in average retirement ages appears to be the leading edge of a new long-term trend. Lengthier careers will likely promote economic growth, increase government revenue, and improve individual financial security at older ages.
|Date of creation:||Nov 2006|
|Date of revision:||Nov 2006|
|Contact details of provider:|| Postal: Hovey House, 140 Commonwealth Avenue, Chestnut Hill, MA 02467|
Phone: (617) 552-1762
Fax: (617) 552-0191
Web page: http://crr.bc.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James H. Stock & David A. Wise, 1988.
"The Pension Inducement to Retire: An Option Value Analysis,"
NBER Working Papers
2660, National Bureau of Economic Research, Inc.
- James H. Stock & David A. Wise, 1990. "The Pension Inducement to Retire: An Option Value Analysis," NBER Chapters, in: Issues in the Economics of Aging, pages 205-230 National Bureau of Economic Research, Inc.
- Kathleen McGarry, 2002.
"Health and Retirement: Do Changes in Health Affect Retirement Expectations?,"
NBER Working Papers
9317, National Bureau of Economic Research, Inc.
- Kathleen McGarry, 2004. "Health and Retirement: Do Changes in Health Affect Retirement Expectations?," Journal of Human Resources, University of Wisconsin Press, vol. 39(3), pages -.
- B. Douglas Bernheim, 1987. "Social Security Benefits: An Empirical Study of Expectations and Realizations," NBER Working Papers 2257, National Bureau of Economic Research, Inc.
- Leora Friedberg, 1999.
"The Labor Supply Effects of the Social Security Earnings Test,"
NBER Working Papers
7200, National Bureau of Economic Research, Inc.
- Leora Friedberg, 2000. "The Labor Supply Effects of the Social Security Earnings Test," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 48-63, February.
- Barbara A. Butrica & Richard W. Johnson & Karen Elizabeth Smith & C. Eugene Steuerle, 2004. "Does Work Pay at Older Ages?," Working Papers, Center for Retirement Research at Boston College wp2004-30, Center for Retirement Research, revised Nov 2004.
- Leora Friedberg & Anthony Webb, 2005.
"Retirement and the Evolution of Pension Structure,"
Journal of Human Resources,
University of Wisconsin Press, vol. 40(2), pages -.
- Debra Sabatini Dwyer & Olivia S. Mitchell, 1998.
"Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?,"
NBER Working Papers
6503, National Bureau of Economic Research, Inc.
- Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, vol. 18(2), pages 173-193, April.
- Debra S. Dwyer & Olivia S. Mitchell, . "Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?," Pension Research Council Working Papers 98-7, Wharton School Pension Research Council, University of Pennsylvania.
- Rogowski, Jeannette & Karoly, Lynn, 2000. "Health insurance and retirement behavior: evidence from the health and retirement survey," Journal of Health Economics, Elsevier, vol. 19(4), pages 529-539, July.
- Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999.
"The dynamic effects of health on the labor force transitions of older workers,"
Elsevier, vol. 6(2), pages 179-202, June.
- John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998. "The Dynamic Effects of Health on the Labor Force Transitions of Older Workers," NBER Working Papers 6777, National Bureau of Economic Research, Inc.
- Richard W. Johnson & Amy J. Davidoff & Kevin Perese, 2003. "Health Insurance Costs and Early Retirement Decisions," ILR Review, Cornell University, ILR School, vol. 56(4), pages 716-729, July.
- Gary Burtless & Joseph F. Quinn, 2000. "Retirement Trends and Policies to Encourage Work Among Older Americans," Boston College Working Papers in Economics 436, Boston College Department of Economics.
- Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
- repec:crr:crrwps:2004-30 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:crr:crrwps:wp2006-19. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Grzybowski)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.