The impact of older workers continues to increase, according to new U.S. Census Bureau data. People over age 65 are becoming a larger share of the population, and more of them are choosing to keep working.
Nearly 1 in 8 Americans is now at least 65 years old, and the Census Bureau projects they will account for more than 1 in 5 people in the United States by 2040. The total could be even larger if a recession-induced reduction in new births continues.
Among current seniors, more than 16 percent were still in the labor force in 2010. That's up from about 12 percent in 1990. In demographic terms, a shift of four percentage points in only 20 years is a big deal. The trend continued in 2011, the bureau said, rising slightly to 16.2 percent.
Older men and women alike have continued to step up their pace of working. Nearly 21 percent of male seniors were in the labor force in 2010, up from 17.6 percent in 1990. The change was larger for women, but they started from a smaller base--8.4 percent in 1990 to 12.5 percent in 2010.
Among "young" seniors--those between 65 and 69--labor-force gains have been much greater. Nearly 31 percent of this group was still in the labor force in 2010, compared with fewer than 22 percent in 1990. For men, the rate rose to 35.8 percent from 27.9 percent; for women, it increased to 26.4 percent from 16.9 percent.
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Yet among even older workers, more people decided to keep working. The Census Bureau says labor-force participation rates among men aged 70 to 74 rose to 20.9 percent in 2010 from 16.6 percent in 1990. For men at least 75 years of age, the rate edged up to 8.6 percent from 8 percent, but actually dipped from 9.3 percent in 2000.
A similar pattern emerged among older women. Labor-force participation rates for women ages 70 to 74 rose to 13.5 percent in 2010 from 8.4 percent in 1990. For women at least 75 years of age, the rate rose to 3.9 percent in 2010 from 2.9 percent in 1990 (also lower than the 4.2 percent rate recorded in 2000).
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Many surveys and anecdotal reports say older Americans need to continue working because of the recession's impact on their household budgets, and particularly on the investment values of their retirement funds. Retirement adequacy has been cited as a rising concern of seniors and older workers nearing retirement. Not only are nest eggs too small, but continued longevity gains have magnified people's fears of outliving their financial resources.
However, there is a strong contrary finding that older Americans have largely continued to work mostly because they like to, and not because they are hurting for money. I'll provide details on this research in tomorrow's column.