Older Men: Pushed into Retirement in the 1970s and 1980s by the Baby Boomers?
Macunovich, Diane J., Monthly Labor Review
During the 1970-1990 period, baby boomers competed with older workers for part-time and part-year jobs, and the retirement age dropped; in more recent decades, the availability of "bridge jobs" may help explain the increase in age at retirement.
The post-World War II baby boomers began entering the labor market in the late 1960s, and their numbers swelled through the 1970s and into the 1980s. Their large size, relative to the size of the cohort of workers ages 45-54, forced a whole host of dislocations for the boomers: high unemployment, low relative wages, and increasing proportions forced into part-time and part-year work. (1) As this article will show, these dislocations reverberated among older workers, too.
The peak of the baby boom had entered the labor force by 1985, but the dislocations did not end there, because the bottleneck created by those in the peak continued to block the later-born boomers who followed. As a result, members of the baby boom did not escape the effects of their cohort's large size even in their thirties, and even members of the relatively smaller cohorts following the peak of the boom continued to find themselves pushed into part-time and part-year work. However, as relative cohort size eased in the 1990s, many of these effects began to ease as well. In particular, the proportion of men ages 25-34 working part year and/or part time fell from 27 percent in 1992 to 19 percent in 2007, a proportion similar to its level before the entry of the baby boom into the job market.
At the same time that this was happening, the retirement rate rose fairly dramatically in the 1970s and 1980s among men ages 55 and older, and their labor force participation rates fell accordingly. As shown below, the retirement rates peaked in 1993 and have declined somewhat since then:
Percentage reporting themselves as retired 1968 1993 2009 Ages 55-61 2 9 7 Ages 62-64 10 33 23 Ages 65-69 31 60 49
In terms of the labor force participation rate, the decline for older men (whom we'll define for purposes of this article as ages 55-69) was steady from the 1970s into the early 1990s. But in the mid-1990s, this decline tapered off, and rates remained fairly constant for a few years, after which they began an increase that has continued largely unabated. The increase in the labor force participation rate among men ages 65-69 has been particularly marked.
Evidence suggests that the correspondence between these two phenomena--strong increases in the period before 1985 in both part-time/part-year work among men ages 25-54 and retirement rates among men ages 55 and older, and declines in both after 1995--is not coincidental. It has been demonstrated in a number of studies that, to a great extent, older men do not retire directly from their career jobs. Instead, they tend to move through part-time and/ or part-year bridge jobs before retiring; this is especially true for men in lower-wage jobs. And very often these bridge jobs do not occur in the same industry or even the same occupation as the career job, suggesting a fairly low level of transference of skills and human capital. Thus to at least some extent, these older men may have been competing for the same part-time, part-year jobs that the baby boomers were crowded into.
Early documentation of the increase in the retirement rate among older men was provided by Joseph F. Quinn in the late 1990s. (2) There is a voluminous literature on the rising patterns of retirement in the 1970s and 1980s among men ages 55-64, but much less attention has been paid to explaining the tapering off and decline in the retirement rate in the past two decades and to trends among men ages 65-69. This article is an attempt to address the long-term trend of labor force participation and retirement among men ages 55-69 in the approximately four decades from 1968 through 2009. …