Publications by Richard W. Johnson for Retirement Policy

Extended job loss dealt a serious financial blow to many workers during the Great Recession and recovery. Despite the protection provided by unemployment insurance benefits, family incomes fell 40 percent or more for half of workers unemployed for at least six consecutive months between August 2008 and December 2011. About a quarter began experiencing economic hardship, including more than a third of African Americans, Hispanics, and unmarried adults. Social Security shielded most workers ages 62 and older from the worst outcomes, although early retirees receive lower monthly retirement checks for the rest of their lives, possibly causing financial hardship later.

This data brief reports 2012 labor force statistics for older Americans, a growing segment of the workforce. It reports labor force participation rates, unemployment rates, employment-to-population ratios, and the share of unemployed workers who have been out of work for more than six months, and compares outcomes to earlier years. Labor market outcomes improved for both younger and older workers in 2012. Older workers continue to fare better than their younger counterparts, although older unemployed adults take longer to find work.

This data brief reports monthly labor force statistics for older Americans, a growing segment of the workforce. It reports labor force participation rates, unemployment rates, employment-to-population ratios, and the share of unemployed workers who have been out of work for more than six months. Employment outcomes did not change much in November 2012 for Americans ages 55 and older. Older workers continue to fare better than their younger counterparts, although older unemployed adults take longer to find work.

The recession has increased joblessness among older Americans. These graphs and tables report unemployment rates and how they have varied by age, sex, race, and education since 2007.

Recent budget pressures have led many states to cut future pension benefits for state workers. Using New Jersey as a case study, this report describes how these reforms ignore larger employee recruitment and retention issues for today's more mobile workforce. State retirement plans generally do not attract younger workers, lock in middle-aged workers even if a job is not a good fit, and push older workers into retirement. Recent reforms also shift pension financing burdens to the young, largely sparing taxpayers and current older workers and retirees.

To control rising pension costs, many states are reducing the generosity of the retirement plans they offer their employees, partly by increasing required employee contributions. These reforms, however, ignore the employee recruitment and retention problems created by traditional pension plans. Using New Jersey as a case study, this brief shows how state retirement plans discourage younger workers from joining the state's workforce, lock in middle-aged workers even if a job is not a good fit, and push older workers into retirement. Recent reforms make these plans even less appealing to a modern, mobile workforce.

When state pension plans are underfunded, someone eventually has to pay for the shortfall. Many recent reforms designed to improve plan finances shift burdens to the young, particularly by making many new employees net contributors to—rather than beneficiaries of—these plans. Using New Jersey as a case study, this brief shows how states require higher levels of employee contributions, invest them in somewhat risky assets, and then, like a bank or financial intermediary, pay back many employees less in benefits than what they contributed and expected to earn on those contributions.

This review of federal policy toward older workers with disabilities highlights the work disincentives built into the Social Security Disability Insurance (DI) system. For example, DI does not pay benefits or provide rehabilitation services until workers are fully disabled, by which time intervention is often too late to promote employment. Because partial benefits are unavailable, DI beneficiaries risk losing all cash benefits (and eventually Medicare coverage) by earning just a dollar more than the earnings limit, reducing the use of DI work supports. Rules governing Social Security retirement, Medicare, and phased retirement also discourage employment by older adults with disabilities.

As unemployment surged during the Great Recession and subsequent recovery, older workers were less likely than their younger counterparts to lose their jobs. However, unemployed workers in their fifties were about a fifth less likely than those age 25 to 34 to become reemployed between 2008 and 2011, and they experienced steep wage losses. Median hourly earnings for reemployed workers age 51 to 61 were 21 percent lower on the new job than the prelayoff job, compared with only 7 percent for those age 25 to 34. These declines may reflect lost productivity or employer reluctance to hire older workers.

After peaking in the wake of the Great Recession, Social Security retirement and disability awards fell in 2011 as the economy improved. Only 27 percent of Americans age 62 and older began collecting retirement benefits that year, the lowest take-up rate since 1976. Disability applications and awards remained unusually high, however. In 2011, 18.9 insured workers per 1,000 applied for Social Security disability benefits, more than in any year except 2010. The surge in disability applications and awards exacerbated Social Security’s financial problems.

Return to list of authors.