Will Unretirement Help Solve the Labor Shortage?

At any given time, a large pool of people ages 55-70 – over 15 million today – indicate they are retired. With the U.S. economy currently facing a labor shortage, the potential return of these retirees to the workforce is an important question. On the one hand, it seems likely that many retired workers could be enticed to return given that the job opening rate is at an all-time high. On the other hand, it is possible that retirement is not a choice easily undone. To evaluate which scenario is likely to play out, this brief uses the Current Population Survey (CPS) to investigate the extent to which retired individuals reentered the labor force (“unretired†) over the last several decades, and how their response varied by labor market conditions. The discussion proceeds as follows. The first section provides background on what we know about unretirement. The second section discusses the data and methodology. The third section offers evidence that the rate of unretirement is generally low but is somewhat responsive to a tight labor market, as indicated by high rates of job openings. The final section concludes that the number of retired workers reentering the labor force as the economy continues to recover is likely to be non-trivial, but small relative to the size of the labor shortage.