Here’s another interesting angle on the “older workers” trend. We know it’s driven in part by need (Boomers are seriously underfunded) and in part by attitude (Boomers have a strong, some critics say insane, work ethic). But there’s another factor, and it may be the decisive one: education.
A new brief from the Center for Retirement Research at Boston College argues that educational attainment explains the big rise in labor force participation at older ages.
Consider these dramatic facts:
– In 1985, only 15% of men in the USA between the ages of 60 and 74 had a university degree. Today, the number is 32%.
– In 1985, more than 40% of men in the USA between the ages of 60 and 74, had not completed high school. Today, the number is only 13%.
It makes perfect sense that a more educated population will stay in the workforce longer. The jump is dramatic now, because there is such a contrast between the education levels achieved by the Boomers and those of their parents or grandparents. The increase in the rate of participation will gradually flatten out, of course, as the equally-well-educated (or even better-educated) Gen X’ers and Millennials reach their 60s and 70s. But in absolute numbers, the participation rate will be very high, compared to the latter part of the 20th century. And the mid- to late 20th century, don’t forget, is when all of today’s social policy assumptions were developed.
Here’s a link to a summary of this research.
And here’s a link to a pdf of the full report:
It’s a huge issue, because it means the phenomenon of older workers will not just be a temporary response to the combination of increased longevity and retirement underfunding. It will continue, even in better economic circumstances. If 30% or 40% of people have university degrees, it’s ridiculous to think they’re going to suddenly stop working at 65, no matter what their financial circumstances are. Yes, they may change what they’re doing, or how much time they spend doing it. But they’re not going to let their brains atrophy or their education go to waste.
Retirement, as we know it (and as our policymakers have assumed it to be), will become obsolete.