A closer look at today’s BLS jobs report reveals that 30% of the job gains in the past two years (and 27% in the past year) have been due to increases in the employment of adults age 65, despite the fact that senior citizens represent less than 5% of the labor force. In March 2012 there were one million more employed adults age 65 and above compared to March 2010. Employment growth among seniors has been about nine times higher than for the rest of the adult population. The rapid job growth for seniors is because: (i) we added 3 million seniors in the past two years, and (ii) older workers are delaying retirement. The 2008 recession and sharp drop in home values reduced the wealth of many households. It is likely that many workers who reached age 65 in the past two years have delayed their retirement in response to the decline in their net worth.
There is one group of workers whose employment rates did not fall during the recession – senior citizens. This, however, is not necessarily good news. Although Americans have been choosing to delay retirement and work later in life for the past few decades, some recent decisions to delay retirement may have been motivated by declines in household wealth during the recession.
The following chart presents changes in the employment to population ratio for adult men over the past four years. I use a “Full-Time Equivalent” notion of employment so that a part-time job counts as one half of a full-time job. The chart shows that the employment to population ratio:
- Fell sharply during the recession and has partially recovered for men under age 65.
- Fell modestly for men age 65 to 69 and has recovered all of the previous losses.
- Increased modestly for men age 70 to 74 even during the recession.
The deep recession damaged the employment prospects of prime working age men more than the aggregate employment figures suggest. The aggregate employment decline was ameliorated by some senior citizens delaying their retirement because of substantial losses in their household wealth.