Retired vs. Rehired: Employment Challenges and Opportunities at Older Ages

1. Retired vs. Rehired: Employment Challenges and Opportunities at Older Ages Richard W. Johnson Urban Institute Plus 50 Initiative 3rd Annual Conference July 8, 2010

2. Key Points • Economic security at older ages is becoming increasingly uncertain as the retirement landscape shifts • Most older Americans will have to work longer • Many older workers will move into jobs that differ from their career employment • Education is the key to working longer

3. The Increase in Social Security’s Full Retirement Age Will Reduce Benefits for Early Retirees

4. Earnings for a Typical Man Haven’t Increased in 30 Years, But Women Are Working and Earning More Men Women Source: Social Security Administration.

5. Traditional Defined Benefit Pensions Are Disappearing in the Private Sector Defined Benefit Pension 31% 39% 8% 20% Only Defined Contribution Plan Source: Cushing-Daniels and Johnson (2008); BLS (2009).

6. Fewer Large Employers Are Offering Retiree Health Benefits Source: Kaiser Family Foundation (2009).

7. As Health Costs Grow, More Seniors Will Experience Financially Burdensome Costs, unless Policies Change Source: Johnson and Mommaerts (2010).

8. Most People Will Eventually Need Long-Term Care Source:Kemper, Komisar, and Alecxih (2006); Spillman and Lubitz (2002)

9. Ongoing Social, Economic, and Demographic Change Will Make Family Care More Difficult • Family sizes are shrinking • Childlessness is growing • More older people are divorced today • More women are working outside the home

11. People Can Improve Later-Life Outcomes by Working Longer • Bolsters individual financial outcomes • More earnings & Social Security and pension credits • Increases ability to save • Shortens the period over which savings are spread • Working an additional year increases annual retirement income by 9% (Butrica, Smith, & Steuerle 2006) • Impact is larger for low-income people • Boosts government tax revenue • May improve emotional well-being, physical health

12. Americans Age 55-84 Were Generally in Better Health in 2007 Than 1983 Age 75-84 Age 65-74 Age 55-64 Source: Urban Institute calculations from the National Health Interview Survey.

13. Jobs Are Less Physically Demanding Now, but Require More Cognitive Ability Source:Johnson, Mermin, and Resseger (2007)

14. Older Adults Are Much Better Educated Today Than 20 Years Ago Source: Urban institute calculations from the Current Population Survey.

15. Men Are Now Working Longer than They Did 15 Years Ago, Which Will Boost Future Retirement Incomes Age 55-61 Age 62-64 Age 65-69 Source: Urban Institute computations from BLS data.

16. Older Women Are Also Working Longer Age 55-61 Age 62-64 Age 65-69 Source: Urban Institute computations from BLS data.

17. The Labor Force Will Turn Grayer as the Population Ages and Older Adults Work More Source: Urban Institute estimates based on U.S. Census and BLS data. Projections assume that the 1999-2009 growth in age- and sex-specific participation rates for adults age 62+ continue through 2019.

18. Where Do Older Workers Work? Occupational Distribution, by Age, 2003-2007

19. Occupations Employing the Most Workers Ages 65+

20. Grayest Occupations

21. Employment Transitions between 1992 and 2006 (Workers Employed Full-Time & Ages 51-55 in 1992)

22. Reason Given for Leaving 1992 Employer (Job Separators Employed Full-Time & Ages 51-55 in 1992)

23. Reason Given for Leaving 1992 Employer,by Education(Job Separators Employed Full-Time & Ages 51-55 in 1992) (17%) (55%) (17%) (11%)

24. Share of Job Leavers Who Obtain New Jobs or Occupations between 1992 and 2006, by Reason for Job Separation (Workers Employed Full-Time & Ages 51-55 in 1992) 89% 71% 50% 32% 21%

25. Share of Job Leavers Who Obtain New Jobs or Occupations between 1992 and 2006, by Education (Workers Employed Full-Time & Ages 51-55 in 1992) 57% 52% 48% 43% Source: Johnson, Kawachi, and Lewis (2008).

26. Median Hourly Wage on Old and New Occupation(All Workers Who Change Occupations After Age 51 Note: Restricted to workers employed full-time on old occupation. Source: Johnson, Kawachi, & Lewis (2008).

27. Employer-Sponsored Health Insurance Coverage on Old and New Occupation, (All Workers Who Change Occupations After Age 51)

28. Selected Job Characteristics on Old & New Occupation(All Workers Who Change Occupations After Age 51)

29. Selected Job Characteristics on Old and New Occupation(All Workers Who Change Occupations After Age 51)

30. Mean Prestige Score for Old and New Occupation(All Workers Who Change Occupations After Age 51)

31. Participation Rates At Older Ages Increase with Education Men Women

32. Health Problems Are More Common Among Workers With Limited Education Men Women

33. Unemployment Rates Have Soared at Older Ages

34. Unemployment Rate for Women, 1948-2009

35. Low-Skilled Workers Are Much More Likely to Unemployed

36. Older Workers Are Less Likely to Lose Their Jobs than Younger Workers

37. Older Unemployed Workers Spend More Time Out of Work Than Their Younger Counterparts

38. Older Laid-off Workers Usually Take Big Pay Cuts When They Find New Jobs

39. Many Older Workers View Age Discrimination as a Problem Source: AARP (2002)

40. Fewer Workers Say They Experienced Age Discrimination Themselves Source: Author’s calculations from the Health and Retirement Study. .

41. Low-Skilled Older Men Are More Likely to Perceive Age Discrimination Source: Author’s calculations from the Health and Retirement Study. .