Academic Literature

The trend toward later retirement has accelerated in most countries

The Great Recession had a large impact on unemployment rates and growth in wealthy industrial countries. When the recession began most rich countries were experiencing an increase in labor force participation rates after age 60.

Labor force participation among people past age 60 fell in nearly all rich countries in the half century after World War II. In recent decades, however, participation rates among the elderly have begun to recover in most of these same countries. With few exceptions wealthy countries saw a decline in old-age labor force exit compared with exit rates that were common before the mid-1990s. The drop in exit rates was hardly uniform across countries, but declines were visible in a large proportion of countries. In an analysis of labor force trends in 21 rich countries after 1960, Burtless (2008) estimated the low point of old-age male participation rates and the subsequent increase in participation rates that occurred after the low point was attained up through 2006. From the participation-rate low he found that average participation rates increased 9.1 percentage points among men 60-64 and rose 5.6 percentage points among men between 65 and 69. These estimates represent average increases in male participation in 21 industrialized countries through 2006. In comparison with the long-term decline in participation rates that occurred after 1960, the increases in male participation rates were not trivial. For men between 60 and 64 the increase offset about one-quarter of the earlier decline between 1960 and the trough year. The rise in the participation rates of older men and women differed widely across countries, and a handful of countries saw little increase. The evidence suggests, however, that rising old-age participation and employment rates were widespread throughout the industrialized world.

The paper examines whether the downturn slowed or reversed the trend toward higher old-age participation rates. The authors use straightforward time series analysis to test for a break in labor force trends after 2007. The results indicate that the average rate of increase in labor force participation slowed in only a handful of countries. Averaging across all 20 countries in our sample, we find that the average pace of labor force participation increase was faster after 2007 than before. Countries that experienced unusually severe downturns represent exceptions to this generalization. In most countries, however, the trend toward later retirement not only continued, it accelerated.

Chosen excerpts by Job Market Monitor. Read the whole story at 

Brookings

via Impact of the Great Recession on Retirement Trends in Industrialized Countries | Brookings Institution.

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