The traditional concept of retirement – in which careers halt one day, and then never start up again – is history. Increasingly, people are working longer, and phasing slowly out of their working lives, says Kevin Cahill, a research economist at the Sloan Center on Aging and Work. While some may see that as a bad sign, Cahill, who specializes in the economics of aging, says it is likely a positive opportunity.
The century-old trend toward earlier and earlier retirement is over - and has been over for decades. Why are American men and women working longer? Is this trend likely to continue?
All signs say that it will continue. The trend of earlier and earlier retirement stopped in the mid-1980s. And what seems to be the explanation for why it stopped is changes in some of the economic incentives – like Social Security, private pensions and savings rates –associated with work later in life. Those changes look like they're certainly not going to be reversed, and might even become more pro-work in the years ahead. I think there's reason to believe that people will remain in the workforce even longer as we go forward.
Why are one-time permanent exits from the labor force becoming less common?
This phasing out of the workforce has just become more diverse over time. It's not just work versus not-work, taking a bridge job versus not taking a bridge job, re-entering versus not re-entering. There are lots of reasons for this. One is the desire of older Americans to have a flexible schedule. If they can't get flexible hours with their career job, it looks like they're very willing to change employers in order to get them.
Why might continued work not be possible for everyone?
As an economist, the first thing to say is, we generally think that leisure is preferable to work: That's why you get paid a wage to go to work, but you don't get paid a wage to not work. So all else equal, there's preferences for leisure as opposed to continued work. But that said, for people who do continue to work later in life, there seems to be a dichotomy where on the lower end of the wage spectrum, they have no choice per se. They work out of need for income.
How many older career workers change jobs following career employment?
What we find is that between a third and 40 percent of people who had a career job change occupations when they move to bridge employment. So it's certainly not a trivial percentage – but it's not the majority. There's lot of people who don't change – a lot just drop out of the labor force directly. But those who do change employers and leave career employment for a bridge job, a sizable minority are changing their occupation.
In the future, older workers are likely to participate in the labor force at a much higher rate than younger individuals. How might this impact the workplace?
Older workers are different from younger workers just for the sole reason that they've been in the workforce a lot longer. They have a lifetime of experience just from living as well as a whole work history that they bring to the table. In one sense, you think the older workers have a lot to contribute. On the other hand, that could cause some friction in the workplace because you have some workers who may think they have it figured it out more so than another group of workers. But my take is that older workers on average bring something different to the table than younger workers and that’s a good thing.
Interview by Jordan G. Teicher