Skip to main content

Employment of Older Workers

EMPLOYMENT OF OLDER WORKERS

People are considered to be employed if they are working for pay in a job that provides them with a salary or a wage, or if they are working for profit, as in a family-owned business. For most people, employment forms a central activity for much of adulthood and not only provides access to income but also contributes to one's identity and sense of self. Yet embedded within the norms about work in the United States is the expectation that as people age, they will give up their paid employment activities. Indeed, many individuals in later life have achieved economic security through private pensions and other forms of wealth accumulated through employment in early and middle adulthood. These individuals often choose a mix of leisure and productive activities such as volunteer work as alternatives to continued employment. Relinquishing paid employment is not a universal experience, however. Some older individuals choose to continue working as a means of supplementing otherwise inadequate economic resources. Still others continue to work for intrinsic reasons, such as enjoyment of work, desire for meaningful activity, or to maintain social connections. Although most older people do not work full-time or year-round, many do participate in employment well into later life.

The age profile of employment

Among both men and women of all racial and ethnic groups in the United States, employment levels reach a peak in midlife. As teenagers and young adults, work often competes with the pursuit of education and training. For many young adults, paid work also may compete with childbearing and child-rearing activities. However, the vast majority of individuals in their forties are employed.

Figure 1 presents the pattern of labor force participation for people age forty and over in 1998. Labor force participants include not only those who are employed but also those who are unemployed and looking for work. Because the unemployment rate is typically quite low among older individuals, the labor force patterns seen in Figure 1 largely reflect rates of employment. More than 90 percent of white men, 80 percent or more of black men and women, and nearly as large a share of white women in their early forties participate in the labor force. Adults fifty or older are progressively less likely to be employed and, among those sixty to sixty-four years of age, fewer than 60 percent are working. However, some individuals are employed well beyond the normative retirement ages. Close to 30 percent of white men aged sixty-five to sixty-nine and nearly 20 percent of white men aged seventy to seventy-four were still in the labor force in 1998, and rates of participation were only slightly lower for the other groups. These individuals often obtain considerable benefits from their work, including economic resources, identity or status enhancement, or meaningful interpersonal relationships (Parnes and Sommers). Although the precise rates of activity fluctuate from year to year, this patterning across age groups characterized the 1990s and is expected to continue for some time.

Race, gender, and employment

As with younger individuals, the levels and types of labor force activity in later life are related to race and gender. Among the groups considered in Figure 1, white men have the highest rates of labor force participation. Black men have the next highest rate, although the gap between white and black men is as great as 10 percentage points among those in their fifties and early sixties. This difference is thought to be a result of several factors, including most notably the higher levels of disability among black men (Bound, Schoenbaum, and Waidmann; Hayward, Friedman and Chen). Although not shown in Figure 1, Hispanic men have rates of labor force participation that are as high or higher than those of white men throughout later life (Hobbs and Damon).

White and black women are much more similar to one another in levels of employment than are their male counterparts, but Hispanic women report lower levels of participation than either group. Keeping in mind that standard assessments of employment take into account only work that is paid or generates profit in a business, the figures show that all groups of women are less likely to be employed than are men. An important factor underlying the gender difference in employment is the fact that many women over age fifty in 1998 were not employed outside of the home for significant periods of time when they were younger. Their later-life activity patterns are therefore shaped not only by ongoing family responsibilities but also by the gender role expectations and work experiences accumulated earlier in life (Pienta, Burr, and Mutchler).

Older individuals are also more likely to work part-time than are their younger counterparts. About 90 percent of workers in their forties work full-time, but this percentage is lower among older age groups; fewer than half of workers aged sixty-five and over work full-time (U.S. Bureau of the Census). Working part-time may be motivated by health limitations, the availability of nonwork income, the desire for leisure, or difficulty in finding full-time work. Nevertheless, more than 90 percent of part-time workers in their sixties report that they prefer part-time to full-time work. Thus, older individuals are less likely to work than are younger individuals, and they are more likely to substitute part-time for full-time work. Notably, this process of reducing participation and hours of employment is evident among people as young as fifty years old.

Historical changes in employment in later life

Prior to the start of the twentieth century, most people were engaged in gainful activity throughout later life. In the absence of the economic security provided by individual wealth or a public or private pension, individuals had no choice but to continue working, or to become dependent on family members or charity (Haber and Gratton). Indeed, retirement emerged as a "social institution" only within the last hundred years (Atchley).

Over the last half of the twentieth century, labor force participation rates among older men declined, while the rates for older women increased. Between 1950 and 1990, participation among men declined; for example, nearly nine out of ten men aged fifty-five to sixty-four participated in the paid workforce in 1950, but only seven out of ten similarly aged men did so in 1990. The most dramatic decline in participation among men sixty-five and over occurred in the 1950s, with more gradual declines occurring over the next three decades. During the 1990s, small increases in employment among older men were evident. Although it is too early to tell if the increases will continue, it appears that the substantial declines in work activity among men that occurred throughout the twentieth century has leveled off. Indeed, projections generated by the Bureau of Labor Statistics indicate that slight increases in activity are expected to continue into the first part of the twenty-first century.

A different pattern of change is observed for older women. Women aged fifty-five to sixty-four doubled their work participation since the 1950s. While about one-quarter of the women in this age group worked in 1950, by the end of the twentieth century half of the women in this age group were employed. In contrast to the sizable increase in employment among women fifty-five to sixty-four, labor force activity among women sixty-five and over has changed very little since 1950 and is expected to remain at 10 percent or less into the twenty-first century.

Several factors explain the trajectories of labor force activity over time among older men and women. During the last half of the twentieth century, participation in Social Security became more widespread, and coverage by private pensions became more common. These forms of nonwork income have resulted in more individuals having investments in public and private pension systems that provide an acceptable standard of living in the absence of work. The declines in employment among younger menthose aged fifty-five to sixty-fourare often linked to the availability of disability income, which serves as an alternative income source for those too disabled to work (Burr, Massagli, Mutchler, and Pienta). Also important for this age group is the reduction of the minimum age of eligibility for receiving Social Security benefits to age sixty-two in the early 1960s.

Working women have been affected by these shifts, but their dramatic increase in labor force activity is largely a reflection of cohort replacement. The women aged fifty-five to sixty-four in 1960, for example, had accumulated little paid work experience over their lifetimes. Often working sporadically, most had married and most had spent substantial periods of time at home raising their children (Moen). In contrast, contemporary cohorts have maintained stronger commitments to paid work throughout their lifetimes. As current cohorts of young women approach later life, we may expect the work activity levels of older women to resemble those of men even more closely.

Several sets of factors account for these changing employment profiles among women. Significant changes in gender roles and improved work opportunities for women have resulted in more women being employed for larger portions of their lives. Another contributing factor has been changes in family life, including more divorce and fewer children among women currently approaching later life. Additional influences on employment levels for both men and women over the last decades of the twentieth century were exerted by shifting economic conditions and associated policies that pushed older workers out of the workforce during recessionary periods, but facilitated their employment or reemployment during times of labor force shortages.

Diversity in late-life employment transitions

A great deal of diversity characterizes employment behavior in later life. Once considered a "crisp" transition between work and nonwork, the transition to retirement is now regarded as a process rather than an event, with many individuals spending years negotiating a "blurred" transition from worker to retiree (Mutchler, Burr, Pienta and Massagli). For many older individuals, the last years of employment are characterized by repeated moves in and out of the work force, along with job changes and fluctuation between full- and part-time work.

Many factors shape whether individuals continue working in later life. Some of the most important factors include the extent to which they can afford not to work, their physical ability to continue working, and their desire to engage in activities that compete with paid labor. In part because the decision to work or retire is so complex and depends on many factors, workers display a variety of pathways through the final years of their work lives. Some workers retire gradually, reducing their hours of work to accommodate their desire for leisure or their changing health or family circumstances, while retaining the financial and other benefits of working. Others change jobs relatively late in life, retiring from long-term employment once they are eligible for pension income and taking on new careers, or shifting to "bridge jobs" that may offer lower status and fewer hours. Some individuals who have retired in their fifties or earlier subsequently return to work either because additional income is required, or because the stimulation or social contact provided by work is desired. Still others never formally retire at allexperiencing in later life a series of short-term or part-time jobs that represent a continuation of work instability throughout the life course.

Gradual retirement from career jobs. Surveys suggest that many older people would like to retire gradually rather than leave the labor force abruptly. For many, the opportunity to remain employed at the same job on a part-time basis, while beginning to draw retirement income, is very appealing. And, because many of today's older people are relatively free from physical disability, gradual retirement provides an attractive alternative to leaving the labor force altogether. Yet gradual retirement is often difficult to negotiate. For example, Quinn, Burkhauser, and Myers estimate that only about one-quarter of those leaving career jobs shift to part-time employment on the same job. Although personal preference plays a part in shaping this low rate of gradual retirement, organizational and institutional barriers are also important. Many employers and private pension plans are unwilling to facilitate gradual retirement. Moreover, until the policy was changed in 2000, many older individuals eligible for Social Security received reduced benefits if they received too much wage or salary income.

Bridge jobs. Rather than remain working at one's existing job or retiring completely, some older individuals change jobs late in their work lives. If an older individual wants to continue working, a job change may be required if his or her existing job is no longer acceptable (for example, if the work is too physically demanding, or if the employer cannot meet the individual's desire for part-time work). Moreover, although mandatory retirement is no longer legal for most workers, some older individuals experience pressures to retire before they would like. Regardless of the reason for job loss, many older individuals need or want to work. These individuals often seek "bridge employment" to span the time period between retirement from or loss of one's career job and permanent retirement (Ruhm).

The kinds of jobs chosen by individuals seeking bridge employment are typically part-time and offer a considerable amount of flexibility. However, they also often pay poorly and offer few benefits, and many of these jobs represent declines in occupational status from the career job. Self-employment is chosen by many as a type of bridge employment in the later years of work life (Quinn and Kozy).

Returning to employment. Some evidence suggests that it is not uncommon for retirees especially those leaving employment in their fifties or earlierto return to work following a period of full-time retirement. Although some of these returns may be motivated by a revised assessment of the appeal of nonwork, the evidence suggests that returns to employment commonly occur because retirees are seeking the income and noncash benefits associated with work. Individuals retiring in their fifties will not typically be eligible for Medicare for many years, and the desire for employer-provided or employer-subsidized health insurance coverage alone may be a motivating force for a return to work. Early retirees may also discover that their pension resources are inadequate to maintain the standard of living desired. Herz suggests that younger retirees may experience retirement with a lower accumulation or more rapid depletion of pension resources than they might have expected had they continued working. Beyond these factors, the low-unemployment environment of the late twentieth century may have generated a greater need for older workers and the emergence of more attractive work opportunities.

Jobs of older workers. The kinds of jobs held by older workers reflect the fact that fewer than half of the population over age sixty-two is employed. Those who are employed in later life are different from those who have retired in many ways, which has implications for the kinds of jobs they hold. Some of those who are working beyond this point are individuals who take great personal satisfaction from their jobs, such as some professionals and some people who are self-employed. Other older workers continue employment because they need the money, and their job opportunities may be less intrinsically satisfying. Some industrial shifts have reduced the employment prospects for older workers, such as the loss of manufacturing jobs; but emerging opportunities in the service and sales sectors have been beneficial, especially for those older workers desiring part-time, flexible, or less physically demanding work (Quadagno and Hardy). Overall, the kinds of jobs held by older workers are not dramatically different from those of their younger counterparts. Among the most common occupational categories for all age groups over age forty are executives, professionals, and administrative support positions such as clerical workers. Compared to middle-aged workers, a somewhat larger share of workers sixty-five and over are in sales, service, or farming occupations (U.S. Bureau of the Census).

Looking ahead

Because the population as a whole is aging, we can expect that the pool of employed or potentially employed people will also age during the first decades of the twenty-first century. Projections of the labor force suggest that the median age of the labor force in the year 2008 will be almost forty yearshigher than any time since the early 1960s (Fullerton, 1999a). This does not necessarily mean that the labor force participation rate of men and women in their sixties or seventies will increase. Whether individuals in these age groups choose to participate in the labor force in the future will be determined by their individual characteristics that drive employment choices, as well as by the changing policy environment within which those choices are made.

Older individuals decide whether or not to work based on their need for continued income or other resources generated through work, their physical ability to continue working, and the attractiveness of their work opportunities as compared to other activities. We can expect that individual decisions will continue to be made on these bases, although each cohort will bring a somewhat different mix of resources and characteristics to the decision-making process. For example, people in their sixties at the start of the twenty-first century are in better health than were earlier cohorts, making continued employment a more realistic option for many. People who reach later life in good health, but with inadequate nonwork economic resources, will be attracted to continued work, or returns to work. Late-life employment will be especially likely if employers offer attractive and flexible job opportunities to older workers.

These individual decisions are made within a policy environment that shapes employment and retirement decisions. For example, the age at which full Social Security benefits may be received began to increase in the year 2000. In addition, in the spring of 2000, Congress lifted the earnings cap for retirees aged sixty-five to sixty-nine, meaning that individuals in this age range can earn as much income as they are able without having their Social Security benefits reduced. These actions may cause some older individuals to remain working for longer periods of time, especially those with few private nonwork resources. It seems likely, however, that employment will continue to occur among only those segments of the older population who find employment a particularly appealing alternative to unpaid activities, as well as those with ongoing needs for wage income.

Jan E. Mutchler

See also Job Performance; Pensions; Retirement Planning; Retirement Transition; Social Security Administration.

BIBLIOGRAPHY

Atchley, R. C. "Retirement as a Social Institution." Annual Review of Sociology 8 (1982): 263287.

Bound, J.; Schoenbaum, M.; and Waidmann, T. "Race Differences in Labor Force Attachment and Disability Status." The Gerontologist 36 (1996): 311321.

Burr, J. A.; Massagli, M. P.; Mutchler, J. E.; and Pienta, A. M. "Labor Force Transitions among Older African Americans and Whites." Social Forces 74 (1996): 963982.

Fullerton, H. N., Jr. "Labor Force Projections to 2008: Steady Growth and Changing Composition." Monthly Labor Review 11 (1999a): 1932.

Fullerton, H. N., Jr. "Labor Force Participation: 75 Years of Change, 195098 and 19982025." Monthly Labor Review 12 (1999b): 312.

Haber, C., and Gratton, B. Old Age and the Search for Security. Bloomington: Indiana University Press, 1994.

Hayward, M. D.; Friedman, S.; and Chen, H. "Race Inequities in Men's Retirement." Journal of Gerontology: Social Sciences 51B (1996): S1S10.

Herz, D. E. "Work after Early Retirement: An Increasing Trend among Men." Monthly Labor Review 4 (1995): 1320.

Hobbs, F., and Damon, B. 65+ in the Unit States. Washington, D.C.: U. S. Bureau of the Census, 1996.

Moen, P. "Continuities and Discontinuities in Women's Labor Force Activity." In Life Course Dynamics. Edited by G. Elder. Ithaca, N.Y.: Cornell University Press, 1985. Pages 113155.

Mutchler, J. E.; Burr, J. A.; Pienta, A. M.; and Massagli, M. P. "Pathways to Labor Force Exit: Work Transitions and Work Instability." Journal of Gerontology: Social Sciences 52B (1997): S4S12.

Parnes, H. S., and Sommers, D. G. "Shunning Retirement: Work Experience of Men in Their Seventies and Early Eighties." Journal of Gerontology: Social Sciences 49 (1994): S117 S124.

Pienta, A.; Burr, J. A.; and Mutchler, J. E. "Women's Labor Force Participation in Later Life: The Effects of Early Work and Family Experience." Journal of Gerontology: Social Sciences 49 (1994): S231S239.

Quadagno, J., and Hardy, M. "Work and Retirement." In Handbook of Aging and the Social Sciences, 4th ed. Edited by R. Binstock and L. George. New York: Academic Press, 1996. Pages 325345.

Quinn, J. F.; Burkhauser, R. V.; and Myers, D. A. Passing the Torch: The Influence of Economic Incentives on Work and Retirement. Kalamazoo, Mich.: W. E. Upjohn Institute, 1990.

Quinn, J. F., and Kozy, M. "The Role of Bridge Jobs in the Retirement Transition: Gender, Race, and Ethnicity." The Gerontologist 36 (1996): 363372.

Ruhm, C. J. "Bridge Jobs and Partial Retirement." Journal of Labor Economics 8 (1990): 482501.

U.S. Bureau of the Census. Current Population Survey: Annual Demographic Survey, 1998. Machine-readable data file obtained through FERRET (Federal Electronic Research and Review Extraction Tool). Available on the Internet at www.census.gov

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Employment of Older Workers." Encyclopedia of Aging. . Encyclopedia.com. 15 Nov. 2018 <https://www.encyclopedia.com>.

"Employment of Older Workers." Encyclopedia of Aging. . Encyclopedia.com. (November 15, 2018). https://www.encyclopedia.com/education/encyclopedias-almanacs-transcripts-and-maps/employment-older-workers

"Employment of Older Workers." Encyclopedia of Aging. . Retrieved November 15, 2018 from Encyclopedia.com: https://www.encyclopedia.com/education/encyclopedias-almanacs-transcripts-and-maps/employment-older-workers

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.