The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
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Boomers will probably want to work longer than earlier cohorts, but their continued work requires that employers hire and retain them. Employers value older workers for their maturity, experience and work ethic, but worry about out of date skills and high costs. Slower overall labor supply growth will increase demand for older workers and occupations with higher shares of older workers will increase modestly as a share of all jobs. Future jobs will require less physical demands and more cognitive and interpersonal skills, trends that favor educated older workers, but job opportunities for less educated older workers may remain limited.
How long baby boomers remain in the labor force will help shape the economic
consequences of an aging population. Population aging poses economic and fiscal challenges as
the ratio of working taxpayers to older benefit recipients decreases. However, the economy could
produce more goods and services if boomers worked longer, boosting living standards for
workers and generating additional tax revenue to fund promised benefits for retirees and other
There are a number of reasons to believe that boomers will want to work longer. Health
improvements and the declining prevalence of physically demanding jobs have made work at
older ages more feasible for many people. Lower Social Security replacement rates and the trend
away from traditional pensions and employer-provided retiree health insurance have made early
retirement less affordable and increased the returns from additional years of work. Surveys
suggest that boomers are increasingly concerned about their ability to afford retirement and that
most intend to work in retirement (MetLife Mature Market Institute 2005 and AARP 2003).
Even if boomers are willing to work longer, however, their opportunities will be limited if
employers are unwilling to hire or retain them. Employers often say they value older workers’
experience, maturity, and strong work ethic, but some express concern about their higher salaries
and benefit costs, combined in the view of some with declining abilities or out-of-date skills.
This report examines the current employer demand for older workers and explores how demand
may be changing over time. It begins by displaying the occupations at which older workers are
most likely to be employed today. The report then discusses the personal and social benefits of
increased work by older adults and the reasons why boomers are likely to try to work longer than
earlier generations. Later sections of the report examine whether employers will want older
workers and how changes in the nature of work, demands for different occupations, the
characteristics of older workers, and overall labor force growth will affect the future demand for
older workers. The report concludes with some policy recommendations.
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