Overview

The American work force is graying — and not just because the American population itself is graying. Older adults are staying in the labor force longer, and younger adults are staying out of it longer. Both trends took shape about two decades ago. Both have intensified during the current recession. And both are expected to continue after the economy recovers. According to one government estimate, 93% of the growth in the U.S. labor force from 2006 to 2016 will be among workers ages 55 and older.

Demographic and economic factors explain some — but not all — of these changes. Attitudes about work also play an important role — in particular, the growing desire of an aging but healthy population to stay active well into the later years of life.

A new nationwide survey by the Pew Research Center’s Social & Demographic Trends project finds that a majority (54%) of workers ages 65 and older say the main reason they work is that they want to. Just 17% say the main reason is that they need the paycheck. An additional 27% say they’re motivated by a mix of desire and need.

When asked to identify specific reasons for working, older workers emphasize psychological and social factors: “to feel useful”; “to give myself something to do”; “to be with other people.” Younger and middle-aged workers are much more inclined to cite classic pocketbook considerations: “to support myself and my family”; “to live independently”; “to qualify for retirement benefits”; “to receive health care benefits.”

To be sure, the current state of the economy has influenced nearly everyone’s calculations about work to some extent. But the recession appears to be having a very different impact, depending on age — keeping older adults in the labor force and younger ones out of it.

According to the Pew Research survey, nearly four-in-ten adults who are working past the median retirement age of 62 say they have delayed their retirement because of the recession. Among workers ages 50 to 61, fully 63% say they might have to push back their expected retirement date because of current economic conditions.

All of these survey findings are consistent with a Pew Research Center analysis of U.S. Census Bureau data that show that the labor force participation rate of older adults, which declined from 1950 until the middle of the 1980s, has been rising ever since. This trend has accelerated during this decade, especially in the current recession.

At the other end of the age spectrum, census data show that in the current decade, a rising share of Americans ages 16 to 24 are in school and a declining share are in the labor force — 57% today versus 66% in 2000.

The Pew Research survey identifies two factors that help explain these changing patterns among the young. First, a growing share of the public says that a person needs a college education to get ahead in life; about three-quarters (73%) of the public feels this way now, up from about half (49%) in 1978. Second, younger adults (like all adults) are being hit hard by the recession, and some may have become discouraged and dropped out of the labor market.

Overall, more than four-in-ten nonworking people ages 16 to 24 say they’ve looked for work but can’t find anything.

Gender Shifts

Age is not the only demographic characteristic of the work force that’s changing. There are also new developments on the gender front — but here, the most compelling story of the decade is not the presence of change but the absence of change.

After marching steadily upward for five decades, the labor force participation rate of women has essentially flattened out. It now stands at 59%, slightly below the 60% peak it reached in 2000 at the end of a period of robust economic growth, and about 13 percentage points below the current rate for men.

Even in an era of growing gender parity in the workplace, the work/family trade-off continues to be much more complicated for women than for men. The Pew Research survey dramatizes these disparities; it finds that nonworking women are nine times as likely as nonworking men to cite the tug of family responsibility as a key reason for not having a job. The survey also finds that only a small share of the public — 12% — thinks the ideal situation for a mother of young children is to work full time outside the home.

As for men, their labor force participation rate has declined in this decade — just as it has every decade since the Bureau of Labor Statistics began keeping such records in 1948. As of June 2009, it stood at 72%, the lowest level in modern history. The current economic downturn has hit men harder than women, with men suffering about two-thirds of all recession-related job losses. As often happens in a recession, a portion of these newly unemployed workers have become discouraged about finding jobs and have dropped out of the labor force altogether.

Other Findings

This report is based on a Pew Research Center analysis of long-term trends in survey data from the U.S. Census Bureau as well as on Pew Research’s own survey of a representative national sample of 1,815 people ages 16 and older conducted from July 20 to Aug. 2, 2009. Among its other key findings:

• Security trumps salary. By a ratio of nearly two-to-one, survey respondents say they would prefer a job that offers better security (59%) over one that offers higher pay (33%) but less stability. It’s not the recession that drives this preference. A similar question asked by the General Social Survey in 1989 (when the economy was in the midst of an expansion) produced a similar result.
• Despite tough times, job satisfaction remains high. Even in the face of widespread layoffs, pay freezes and involuntary furloughs, nine-in-ten employed adults say they are either completely (30%) or mostly (60%) satisfied with their job. In recent decades, levels of job satisfaction have tended to remain stable through good times and bad.
• Older workers are the happiest workers. Some 54% of workers ages 65 and older say they are “completely satisfied” with their job, compared with just 29% of workers ages 16 to 64. The explanation lies in figures cited above — a high percentage of these workers are working because they want to, not because they need to.
• Retirement is not always voluntary. Only about half (51%) of all current retirees say they retired because they wanted to. About a third (32%) say they had to retire for health or other reasons, and about one-in-ten (9%) say their employer forced them to retire.
• Even so, retirement gets high marks. More than half of all retirees (57%) say their retirement has turned out to be very satisfying; an additional 23% say it has been fairly satisfying. Only about one-in-six describe retirement as not too (10%) or not at all (6%) satisfying.
• The public is skeptical about full-time working moms. Just 14% of men and 10% of women say that a full-time job is the “ideal” situation for a woman who has a young child. A plurality of the public (44%) say a part-time job is ideal for such a mother, while a sizable minority (38%) say the ideal situation is for her not to work outside the home at all.
• Most working moms would rather have a part-time job. Among mothers of young children who have a full-time job outside the home, six-in-ten (61%) say they would prefer to work part time. By contrast, just 19% of fathers who have a full-time job and a young child say they would prefer to work part time.

Continue reading the full report at pewsocialtrends.org.

In the midst of a recession that has taken a heavy toll on many nest eggs, just over half of all working adults ages 50 to 64 say they may delay their retirement — and another 16% say they never expect to stop working, according to a national survey by the Pew Research Center’s Social & Demographic Trends Project.

Overall, 37% of full-time employed adults of all ages say they have thought in the past year about postponing their eventual retirement. This proportion swells to 52% among fulltime workers ages 50 to 64. Members of this so-called “Threshold Generation” are twice as likely as younger workers to say they never plan to retire (16% vs. 8%).

Moreover, the Thresholders who do plan to retire someday say they plan to keep working, on average, until they are age 66 — when they would be four years older than the age at which current retirees age 65 or older report that they stopped working.

The Pew Research survey also finds that it may not be how much you earn but how much you lost in the investment market meltdown that determines whether you are re-thinking your retirement plans. Among the Threshold Generation as well as among other age groups, higher-income earners are only slightly less likely than lower-income adults to have considered postponing retirement. But regardless of income or age, those who have lost 40% or more of their investment nest eggs are roughly twice as likely as those who haven’t lost money in the market meltdown to say they have thought about delaying their eventual exit from the workforce.

The heightened inclination to delay retirement appears to be driven in part by the current recession, but it is also in sync with longer-term labor market trends. The labor force participation rate of those ages 65 and older has increased from 12.9% in 2000 to 16.8% in 2008.¹ A similar trend is also evident this decade among members of the Threshold Generation.

The Pew Research findings are based on a telephone survey of a nationally representative sample of 2,969 adults conducted from February 23 through March 23, 2009. An earlier report based in part on that survey explored the varied impact of the recession on young, middle-aged and older adults. This new analysis examines in greater depth the impact of the recession on the retirement plans of one particular group: adults ages 50 to 64 who are employed fulltime. Poised at the threshold of retirement, these working Americans have suffered the greatest losses in their nest eggs and worry the most about their financial future.

The Demographics of Delay

Age is not the only demographic factor that helps predict who has been rethinking their retirement plans. Among all age groups, nearly half of all full-time employed women (46%) say they have thought about delaying retirement in the past year, compared with less than a third of all working men (31%). Also, 40% of whites have thought about extending their working lives, compared with 32% of blacks and 34% of Hispanics.

Income matters, too, in whether people are considering delaying retirement — but not as much as one might think. Among those with family incomes of less than $30,000, more than four-in-ten (44%) have thought about postponing their retirement, compared with 37% of those earning $100,000 or more. Similarly, more than a third of those making $30,000 to $50,000 (36%) and $50,000 to $100,000 (38%) have considered working longer as the recession settled in during the past year.

The Threshold Generation

Nothing like hard times in late middle age to focus the mind: In the past year, those on the threshold of retirement have given the most thought to the timing of their departure from the workplace. Among adults ages 50 to 64 who are employed fulltime, slightly more than half (52%) say they have thought about delaying retirement, with women once again the most likely to say so.

Six-in-ten women working full-time in this age group say they have reconsidered when they will retire, compared with slightly less than half of all men (61% vs. 45%), a gender gap consistent with other research that has found women often approach retirement age with fewer economic resources to draw on than do men. But among these late-middle aged adults, there is little difference by income: those with family incomes of $75,000 or more are as likely as those earning less to say they have considered delaying retirement.

Working adults who are closer to the traditional retirement age of 65 are even more likely than younger members of the Threshold Generation to have considered delaying their retirement. Some 68% of those ages 57 to 64 say they have thought about delaying retirement, compared with 44% of those ages 50 to 56.

The Confidence Gap

Working members of the Threshold Generation are the least confident of any age group that they will have enough money to make it through their retirement years. Barely two-in-ten (21%) of those ages 50 to 64 say they are “very confident” that they have enough income and assets to tide them over, compared with 37% of fulltime workers younger than age 30 and 40% of those ages 65 and older.

Most Americans, young or old, say that the recession has made it harder to take care of their financial needs in retirement. But working adults in the Threshold Generation are more inclined than any other age group to feel this way. Among those ages 50 to 64 with fulltime jobs, more than three-quarters (78%) say that the recession has made it harder for them to take care of their financial needs in retirement, compared with 66% of those younger than 50.

Income matters surprisingly little in fueling the recession-driven financial worries of the Threshold Generation. Some 69% of those with family incomes under $30,000 as well as 76% of those with incomes of $100,000 or more say the recession will make it harder to take care of their financial needs once they retire.

Similarly, there is little difference by gender, by levels of education or by race, suggesting that these concerns are broadly felt by many adults nearing the end of their working lives.

Investment Losses and Retirement Plans

The worries of the Threshold Generation are rooted in reality: Among all adults, it is the Threshold Generation that has seen the value of their investments decline the most in the past year. About three-quarters of adults ages 50 to 64 say they lost money in mutual funds, individual stocks or retirement accounts such as a 401(k)s, compared with barely half of those younger than age 50 (76% vs. 54%).

These losses appear to have helped trigger some rethinking about the timing of retirement. Working members of the Threshold Generation who lost money on investments are more likely than those who didn’t suffer losses to say they’ve considered delaying retirement (54% vs. 45%). And they’re more likely to have considered taking this step than are adults below the age of 50 who lost money in the market (54% vs. 34%).

Investment losses also impact financial confidence. More than eight-in-ten (82%) working members of the Threshold Generation who lost money in the past year say the recession will make it harder for them to meet their financial needs in retirement, compared with 66% of those ages 18 to 49.

Size matters, the survey also found. Among all adults employed fulltime, those who lost 40% or more of their investment nest eggs are twice as likely as those who lost nothing to say they have thought about delaying their exit from the workforce (59% vs. 29%). While the sample size is too small to draw firm conclusions, the pattern is roughly the same for employed members of the Threshold Generation: Those who lost more than 20% are about twice as likely to say they have considered delaying retirement as are those who sustained smaller setbacks or did not lose money.

_{1. Changes in Social Security legislation along with the transition from defined-benefit to defined-contribution pension plans have in recent years increased incentives to work at older ages. For more detail, see Steven Hipple and Abraham Mosisa, “Trends in Labor Force Participation in the United States,” Monthly Labor Review (October 2006): 35-57. The labor force participation rate is the share of the working-age population that is either employed or actively looking for work. Data on labor force participation are from the Bureau of Labor Statistics (BLS).}

Working After Retirement: Expectations and Reality Are Out of Sync

<p >Among the 77% of the currently employed (and not retired) public who say they expect to do some kind of work for pay after they retire, there are no significant differences by age, income, gender, race, ethnicity, education or region. In short, this has now become a widely-held expectation among virtually all kinds of people. <p >It doesn’t matter if a person is self-employed or not; if a person works for a big organization or a small one; if a person derives a strong sense of identity from work or not; all are equally likely to say they expect to work for pay after they retire. <p >There is a small difference on this question by the type of work people do. Some 79% of white collar workers say they expect to do some kind of work for pay after they retire, while just 73% of blue collar workers say this. Also, people who work in a school setting are a bit more inclined (85%) than others to say they expect to do some sort of work for pay after they retire. <p >The expectations that today’s workers have about working after retirement are sharply different from the actual experiences of today’s retirees. <p >The Pew survey finds that just 12% percent of people who are currently retired report that they are currently working, either full-time (5%) or part-time (7%). Also, a survey taken earlier this year by the Employee Benefit Research Institute found that just 27% of today’s retirees report that they have ever worked for pay after retirement. <p >Retired men are more likely than retired women to report working; 16% of men are doing so compared with 7% of women. Retirees who have graduated from college are also more likely to be working for pay (20%) than are those who have less education (9%).

Working After Retirement: Have to or Want to?

<p >By a two-to-one margin, those who expect to work after retirement say they will do so mostly because they’ll want to rather than because they’ll have to. <p >Not surprisingly, there are some significant differences in expectations on this question according to how much money people earn and the kind of work they do. <p >Those with more education and more income are the most likely to say they’ll work after retirement because they want to, not because they have to. Also, younger workers (ages 18 to 29) and the self-employed are more likely than others to say they’ll work after retirement out of desire rather than necessity. <p >On the other side of the coin, parents of minor age children are more likely than others to say they expect to work after retirement because they’ll need to, not because they’ll want to. Blue collar workers are also more likely to say this, as are hourly workers of all kinds.<p >But other than that, there are no significant differences on this question by gender, race, marital status or region of the country.

Working After Retirement: Who’s Thought About It?

<p >Older adults are more likely to report having given either some or a lot of thought to the question of whether they’ll work after retirement. Fully 66% of non-retirees ages 50 and older report giving this question a lot or some thought; 53% of those ages 30 to 49 and 39% of those ages 18 to 29 have done the same. <p >Regardless of their current age, those who have thought about whether or not they will work after retirement are much more likely than those who haven’t thought about it as much to say they will work after retirement. Among those who have thought about this issue at least some, nine-in-ten say they are likely to work for pay after retirement. Among those who have given less thought to this issue, 62% think they are likely to work for pay after retirement.

Age of Retirement: Expectations and Reality

<p >Workers plan to retire, on average, at age 61. Not surprisingly, older workers say their retirement will be later in life than do younger workers. <p >For example, the anticipated retirement age among those ages 50 and older is an average of 63.7 compared with 58.8 among those currently ages 18 to 29. <p >Working men are a bit more likely than working women, on average, to plan an early retirement; 39% of working men plan to retire at or before reaching age 61 compared with 32% among working women. Working women are less likely to name a specific age for retirement, however; among all those who name a planned retirement age, the average anticipated age of retirement is about the same for men and women. <p >Not surprisingly, workers with higher family incomes are more likely to say they will retire on the early side; 44% of those with incomes of $100,000 or more say they will retire at or before reaching age 61. The comparable figure for those with incomes under $30,000 is 29%. Less affluent workers are less likely than those with more affluence to name a specific age for planned retirement; among those who name a planned retirement age, the mean differences across income groups are modest.<p >There are modest differences in anticipated retirement age among education groups. Those with less education anticipate an earlier retirement age, on average, than do those with more education. Whites foresee a longer working life than do blacks. Half of all black workers plan to retire on or before reaching age 61; a third of white workers say the same. The mean age for anticipated retirement is 56.8 among blacks and 61.7 among white workers. The pattern among Hispanics is similar to that of blacks but there are too few Hispanic workers in the sample for reliable analysis.

About the Pew Social Trends Reports

<p >The Pew social trends reports explore the behaviors and attitudes of Americans in key realms of their lives – family, community, health, finance, work and leisure. Reports analyze changes over time in social behaviors and probe for differences and similarities between key sub-groups in the population. <p >The surveys are conducted by the Pew Research Center, a nonpartisan “fact tank” that provides information on the issues, attitudes and trends shaping America and the world. <p >Survey reports are the result of the collaborative effort of the social trends staff, which consists of:<p >Paul Taylor, Executive Vice President

Cary Funk, Senior Project Director

Peyton Craighill, Project Director

Related Reports from the Pew Research Center

<p >American Work Life Is Worsening, But Most Workers Still Content. August 30, 2006. Pew Research Center.

Notes

<p >¹2006 Retirement Confidence Survey. Employee Benefit Research Institute and Matthew Greenwald & Associates. <p >²For labor force participation rates among older adults (ages 55 and older) see indicator 11 in Older Americans Update 2006: Key Indicators of Well-Being, Federal Interagency Forum on Aging-Related Statistics. For age of expected retirement see Gallup surveys from 1989 to 2005. Gallup asked all non-retirees “When do you plan to retire?” from 1989 to 1993 and “When do you expect to retire?” from 1995 to 2005. <p >³U.S. Census Bureau Population Projections, U.S. Interim Projections by Age, Sex, Race and Hispanic Origin. Table 2a “Projected Population of the United States by Age and Sex: 2000 to 2050″ (released March 2004). <p > Download the complete report

Some 77 million strong, baby boomers – born between 1946 and 1964 – have been trendsetters throughout their lives, and their retirement choices are expected to be no different. Instead of beating paths to Florida and Arizona, aging boomers already are opting for unconventional, far-flung U.S. locations, primarily in the South and West.

State and local governments – vying for their share of the great boomer migration – are developing innovative ways to attract and keep this healthy, wealthy and relatively young new breed of retirees. Their hope is that boomers – with their enormous wealth and diverse talents – will breathe new life into rural communities, many of which are slowly declining as younger workers move to metropolitan areas.

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As the oldest of the nation’s 75 million baby boomers approach the age of 60, a Pew Research Center survey finds many are looking ahead to their own retirement while balancing a full plate of family responsibilities – either raising minor children or providing financial and other forms of support to adult children or to aging parents.

In the past year, 50% of all boomers were raising one or more young children and/or providing primary financial support to one or more adult children, while another 17% whose only children are ages 18 and older were providing some financial assistance to at least one such child, according to the survey. In addition, the survey finds that two-in-ten boomers were providing some financial assistance to a parent. Few boomers bear all these responsibilities simultaneously; the survey finds that about 13% are providing some financial support to a parent at the same time as they are also either raising a minor child or supporting an adult child.

The baby boomers currently range in age from 41 through 59 (the oldest turned 60 in January) and, like middle-aged generations before them, they are in a stage of life when it is natural to give more than to take when it comes to family relationships. However, changing demographics within families have prolonged for boomers this period of being “sandwiched” between the needs of their parents and their children.

The national survey conducted from Oct. 5 to Nov. 6 among 3,014 adults, including 1,117 boomers, looks at intergenerational relationships within families. This is the first in a new series of surveys by the Pew Research Center that examine social trends and explore the everyday lives of Americans at work, at play, in their communities and in their families.

Major findings from the report include:

• In their financial exchanges both with parents and adult children, boomers are more likely to give than receive. For example, of those boomers with a living parent, nearly three-in-ten (29%) report that in the past year they provided financial assistance to a parent, while 19% report that they received financial assistance.
• Boomers are now more likely to have living parents. Thanks to advances in life expectancy, 71% of today’s boomers have at least one living parent, the survey found. In 1989, just 60 percent of people ages 41 to 59 had at least one living parent, according to a Gallup survey.
• When it comes to providing financial support for children, the boomers’ parental role usually extends beyond the time when a child is a minor. Some 63% of boomers report that they have at least one adult child (ages 18 and older), and of this group, about two thirds (68%) say they are supporting an adult child financially, either as the primary (33%) or secondary (35%) source of support.
• Boomers view financing a child’s college education as a parental responsibility. Sixty-six percent of boomers – and 62% of the adult public, in general – describe paying for a child’s college as a parental responsibility. A majority of boomers (56%) also say it is a responsibility to allow an elderly parent to live in one’s home if the parent wants to move in.
• Boomers, younger adults and current retirees all share a moderate optimism about their finances in retirement. More than half of boomers who are not yet retired say they expect to “live very comfortably” (26%) or to be able to “meet expenses with a little left over” (29%) once they retire. Non-retired boomers are a bit more apprehensive than are younger adults and current retirees about the prospect of not having enough money in retirement.
• Boomers say IRA’s and 401(k)’s will be biggest source of retirement income. While a plurality of current retirees (42%) say that Social Security is their biggest source of income, just 21% of non-retired boomers and even fewer adults ages 18 to 40 (13%) hold that expectation. Instead, about half (49%) of boomers who are not yet retired say that a 401(k) or IRA savings plan will be their biggest source of income during retirement, and fully two-thirds of adults ages 18 to 40 share that view.
• Boomers are satisfied with their family life. Nine-in-ten boomers say they are very (72%) or somewhat (18%) satisfied with their family life. These assessments place boomers in sync with adults older and younger than they are. There is less overall satisfaction with family life among the 13 percent of boomers who have an elderly parent who needs help caring for himself or herself.

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