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Older Women: Pushed into Retirement by the Baby Boomers?

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  • Macunovich, Diane J.

    () (University of Redlands)

Abstract

Older women's patterns of labor supply over the past forty years have differed markedly from those of younger women. Their labor force participation declined sharply during a period of rapid increase for younger women, and then increased significantly while younger women's plateaued and even declined. But there has been an apparent correspondence between the pattern of retirement among women aged 55-69, and the proportion of workers aged 25-34 working part-year and/or part-time. The latter was an effect of overcrowding among the baby boomers as they moved through the labor market. The former is hypothesized here to be a function of the increasing difficulty older women experienced in obtaining "bridge jobs" – part-year and/or part-time – between career and retirement. It has been demonstrated in earlier studies that older women – especially those in lower-wage jobs – often seek such bridge jobs before retirement. And in many cases these bridge jobs are not in the same industry or even occupation as the career job, leading one to suspect that in many cases there might be little transfer of skill or human capital. If this is the case, then the older workers would at least to some extent be in direct competition with younger workers for these jobs. Given difficulty in finding bridge jobs, a higher proportion of older workers might choose to enter retirement directly from career jobs, skipping the bridge jobs. A relative cohort size measure – the number of 25-34 year old women working part-year and/or part-time, relative to the number of older women, at the state level – has been shown here to be highly significant – both statistically and substantively – in explaining changes in older women's annual hours worked, labor force participation, and propensity to retire. In general terms, relative cohort size can be said to have generated between 15-30% of the observed changes in these variables, with the strongest effects being on the propensity to claim Social Security benefits. Somewhat stronger effects were found for older men, in a companion to this study.

Suggested Citation

  • Macunovich, Diane J., 2009. "Older Women: Pushed into Retirement by the Baby Boomers?," IZA Discussion Papers 4653, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4653
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    References listed on IDEAS

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    1. Christopher J. Ruhm, 1995. "Secular Changes in the Work and Retirement Patterns of Older Men," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 362-385.
    2. Michael D. Giandrea & Kevin E. Cahill & Joseph F. Quinn, 2007. "Bridge Jobs: A Comparison across Cohorts," Boston College Working Papers in Economics 670, Boston College Department of Economics, revised 22 Dec 2008.
    3. Macunovich, Diane J., 2009. "Older Men: Pushed into Retirement by the Baby Boomers?," IZA Discussion Papers 4652, Institute for the Study of Labor (IZA).
    4. Michael D. Giandrea & Kevin E. Cahill & Joseph F. Quinn, 2008. "Self-Employment Transitions among Older American Workers with Career Jobs," Boston College Working Papers in Economics 684, Boston College Department of Economics.
    5. Welch, Finis, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 65-97, October.
    6. Krueger, Alan B & Pischke, Jorn-Steffen, 1992. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 412-437, October.
    7. Kevin E. Cahill & Michael D. Giandrea & Joseph F. Quinn, 2006. "A Micro-level Analysis of Recent Increases in Labor Force Participation among Older Workers," Working Papers 400, U.S. Bureau of Labor Statistics.
    8. Marjorie Honig, 1985. "Partial Retirement among Women," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 613-621.
    9. Diane J. Macunovich, 1999. "The fortunes of one's birth: Relative cohort size and the youth labor market in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(2), pages 215-272.
    10. Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
    11. Ruhm, Christopher J, 1990. "Bridge Jobs and Partial Retirement," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 482-501, October.
    12. Engelhardt, Gary V. & Kumar, Anil, 2009. "The repeal of the retirement earnings test and the labor supply of older men," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(04), pages 429-450, October.
    13. Lynn A. Karoly & Jeannette A. Rogowski, 1994. "The Effect of Access to Post-Retirement Health Insurance on the Decision to Retire Early," ILR Review, Cornell University, ILR School, vol. 48(1), pages 103-123, October.
    14. Stephen Rubb, 2002. "US Social Security rules in the 1990s: a natural experiment in myopic and farsighted behaviour," Applied Economics Letters, Taylor & Francis Journals, vol. 9(10), pages 637-640.
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    Cited by:

    1. Alfred Garloff & Carsten Pohl & Norbert Schanne, 2013. "Do small labor market entry cohorts reduce unemployment?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(15), pages 379-406, September.
    2. Macunovich, Diane J., 2009. "Older Men: Pushed into Retirement by the Baby Boomers?," IZA Discussion Papers 4652, Institute for the Study of Labor (IZA).
    3. Boockmann, Bernhard & Fries, Jan & Göbel, Christian, 2012. "Specific measures for older employees and late career employment," ZEW Discussion Papers 12-059, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    retirement; women's labor supply; labor force participation; relative cohort size; relative wage; part-time employment; bridge jobs; baby boom;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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