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Recessions and Older Workers

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  • Alicia H. Munnell
  • Dan Muldoon
  • Steven A. Sass

Abstract

With the economy sliding ever deeper into recession, questions arise about how older workers are faring and how their fate relative to younger workers compares to the past. The answer to these questions turns out to be a little complicated. Two forces are at work. On the one hand, labor force participation among older workers has been rising since the early 1990s, a reversal of the long-standing trend toward ever-earlier retirement. Participation rates among older workers have even continued to rise during both of the recessions in this decade – a dramatic change from previous experience. On the other hand, the edge that older workers used to have relative to younger workers when it comes to layoffs seems to have disappeared, so the rise in the unemployment rate for older workers in recessions now looks similar to that for younger workers. Of the two forces, the trend growth in labor force participation appears to dominate, which has helped keep the employment rate of older workers from falling during the current recession. This pattern contrasts sharply with the far more typical decline in employment rates for workers under age 55. This brief is organized as follows. The first section discusses the upward trend in the labor force participation of older men. The second section explores why older men may have lost some of their edge with regard to job security. The third section looks at how these two developments – the secular upward trend in labor force participation and the heightened vulnerability to layoffs relative to younger workers – have affected the employment rates of older men in this recession compared to earlier ones. The fourth section concludes.

Suggested Citation

  • Alicia H. Munnell & Dan Muldoon & Steven A. Sass, 2009. "Recessions and Older Workers," Issues in Brief ib2009-9-2, Center for Retirement Research, revised Jan 2009.
  • Handle: RePEc:crr:issbrf:ib2009-9-2
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    File URL: http://crr.bc.edu/briefs/recessions-and-older-workers/
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    References listed on IDEAS

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    1. Leora Friedberg & Anthony Webb, 2006. "Persistence in Labor Supply and the Response to the Social Security Earnings Test," Working Papers, Center for Retirement Research at Boston College wp2006-27, Center for Retirement Research, revised Dec 2006.
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    6. Alicia H. Munnell & Steven Sass & Mauricio Soto & Natalia Zhivan, 2006. "Has the Displacement of Older Workers Increased?," Working Papers, Center for Retirement Research at Boston College wp2006-17, Center for Retirement Research, revised Sep 2006.
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    Citations

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    Cited by:

    1. Vincenzo Galasso, 2012. "The Political Feasibility of Postponing Retirement," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(4), pages 27-31, December.
    2. Alicia H. Munnell & Steven A. Sass & Natalia A. Zhivan, 2009. "Why Are Older Workers At Greater Risk of Displacement?," Issues in Brief ib2009-9-10, Center for Retirement Research, revised May 2009.
    3. repec:eee:hapoch:v1_237 is not listed on IDEAS
    4. David Neumark & Patrick Button, 2014. "Did Age Discrimination Protections Help Older Workers Weather the Great Recession?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 33(3), pages 566-601, June.
    5. repec:ces:ifodic:v:10:y:2012:i:4:p:19074540 is not listed on IDEAS
    6. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2011. "How Did the Recession of 2007-2009 Affect the Wealth and Retirement of the Near Retirement Age Population in the Health and Retirement Study?," NBER Working Papers 17547, National Bureau of Economic Research, Inc.
    7. Fang, H., 2016. "Insurance Markets for the Elderly," Handbook of the Economics of Population Aging, Elsevier.

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