Academic journal article Social Security Bulletin

Summary of Recent Research - as the Workforce Ages: Costs, Benefits, and Policy Challenges

Academic journal article Social Security Bulletin

Summary of Recent Research - as the Workforce Ages: Costs, Benefits, and Policy Challenges

Article excerpt

The age structure of the population in the United States is expected to change rapidly and dramatically in the 21st century. In 1990, 61.8 percent of the U.S. population was between the ages of 17 and 65, and 12.6 percent of the population was aged 65 or older. By the year 2030, it is projected that the percentage of the population between the ages of 17 and 65 will decrease to 57.5 percent and the percentage of the population aged 65 or older will increase to 21.8 percent. This aging or "graying" of America. is largely a result of the relatively low fertility rate of the baby boom generation (relative to past generations) and recent increases in life expectancy.

The aging of America may be the most important demographic change this country will undergo in the 21st century. It will certainly have substantial effects on the operation of the U.S. labor market. Individuals, private firms, and the government are all likely to alter their behavior in response to the realities of an older society and an older work force. Individuals, because of increased life expectancy, may begin to choose later retirement ages. Private firms, in light of an older work force and increased life expectancy, may feel compelled to alter company sponsored pension and health insurance plans. These organizations may also feel compelled to make alterations in work schedules and work environments to accommodate an older, and possibly more frail, work force. Because some public expenditures for the elderly depend on their work behavior, the government may enact policies designed to encourage retirement at later ages. Indeed, the normal retirement age under Social Security is already scheduled to rise in the next century.

These issues and many others are analyzed in As the Workforce Ages: Costs, Benefits, and Policy Challenges, a recently published book on the labor-market implications of an aging society. This volume consists of a collection of papers presented at a 1991 conference on labor-market policy at Cornell University's School Industrial and Labor Relations. The volume is introduced and edited by Olivia S. Mitchell, a professor of labor economics at Cornell.

The book is divided into three parts: Part I, "Aging Workers Around the World;" Part II, "New Jobs for an Older Workforce;" and Part III, "Policy Challenges of an Aging Workforce." Parts I and III contain three papers each and Part II contains four papers. Although the titles of each part give a rough idea of the content of the papers that are included, the reader of this volume will quickly observe that neither the volume as a whole nor the individual parts are intended to reflect integrated work. Thus, even papers within the individual parts may be only loosely related.

Researchers, policy analysts, and policymakers are the intended audience for this collection of papers. However, general readers interested in the aging phenomenon and its implications will find much of this volume accessible.

The opening paper of Part I is "Demographic Change and the Destiny of the Working-Age Population," by Martha Farnsworth Riche. In terms of subject matter, this paper is probably the broadest of the entire volume and, consequently, it will likely have the most appeal across different types of readers. Riche's paper provides a good overview of the demographic changes that will likely occur in American society and the implications for the U.S. labor market. One of the important points made by Riche is that, as our society ages, the characteristics of the elderly will become increasingly different from the characteristics of the young. For example, members of minority groups (blacks, Hispanics) are currently younger than whites (based on median ages of the groups) and the age gap between these groups is expected to rise. Riche believes that this is an important trend because, in the past, minorities have had special labor-market problems. As these groups of individuals represent larger fractions of the working-age population, it will become increasingly important to address these problems. …

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