Work and Earnings Are Changing
Men's labor force participation rates from ages 25 to 54 have declined slightly over time, but remain relatively high at 90 percent. Men ages 55 and older are much less likely to participate in the labor force today than 45 years ago, largely reflecting the availability of early Social Security retirement benefits beginning in 1961. However, older men's participation rates have been increasing over the past 15 years. This trend is somewhat more pronounced for men ages 65 and older. Work at older ages can substantially improve retirement incomes by boosting lifetime earnings and reducing the number of years over which retirement savings must be spread.
Women's labor force participation has increased dramatically over the past half century. The rate for women ages 25 to 54 nearly doubled from 42 percent in 1960 to 78 percent in 2000 and has since begun to decline slightly. Rates for women ages 55 to 64 have also increased dramatically, while those for women ages 65 and older have remained fairly flat. Increased labor market participation for women means that more will earn Social Security benefits in their own name and accumulate other types of retirement savings.
Men's median annual earnings increased steadily between 1950 and the mid 1970s, even after adjusting for inflation. However, men's real median earnings have since stagnated and were 10 percent lower in 2005 than 1975. Inflation-adjusted median earnings for employed women has increased steadily over time, as women have worked more hours and increased their hourly wage rates.