"Do not go gentle into that good night:" Labor force participation of older American men
Beginning in the mid-1990s Bureau of Labor Statistics data reveal labor force participation rates in the United States for workers over the age of 55 begin to rise and continue to rise almost two decades later. This trend occurred concurrently as labor force participation rates for the labor force as a whole began to fall in the mid-1990s.
The objectives of this paper are twofold. I first describe changes in labor force participation of men 55 years of age or older, focusing on human capital, industrial, and demographic variables. I then estimate their labor force participation and decompose these estimates into cyclical and structural changes.
Data and Methods
I utilize family data files from the Panel Study of Income Dynamics (or from the Census Bureau). The sample used here consists of “older” men. I hypothesize that rising labor force participation rates can be explained by qualitative changes in the nature of work, by changes in life expectancies, by public policy, and by changes in wealth. Employing a probit model, I decompose the effects of changes in characteristics and changes in behaviors to analyze their relative importance in explaining rising participation rates. For selected years labor force participation is estimated using a common set of parameter coefficients and with a common set of human capital characteristics.
Expected Results
Rising labor force participation of older men has many and diverse causes, including health, technological, as well as economic. Most notably I anticipate that the rise in labor force participation rates among older workers is due to changes in the nature of work as well as better health.
Discussion
With falling labor force participation rates for workers as a whole, the rise in participation rates of those over the age of 55 years may offset the deleterious effects on economic growth of a decline in labor supply. Empirical analysis can shed light on the roles technology, the changing nature and composition of industry and occupation, as well as the role of human capital can play in understanding the rise in labor force participation of older workers and providing a basis for policy recommendations.