The Book

Many policymakers think it's logical—almost inevitable—that Americans will delay retirement and spend more years in the paid labor force.

But that assumption that doesn't match the reality of a large and growing proportion of Americans. Though today's middle-aged adults are less financially prepared for retirement than today's retirees, delayed retirement is not an adequate solution. Precarious working conditions, family caregiving responsibilities, poor health, and age discrimination make it difficult or impossible for many to work longer.

Overtime offers a revelatory corrective to our understanding of the future of America's aging workforce. Experts across economics, sociology, psychology, political science, and epidemiology examine how increasing economic and social inequalities, coupled with changes across generations or birth cohorts, call for a rethinking of the working-longer policy framework.

The contributors shed light on the challenges faced by marginalized social groups while showing that our society’s responses to an aging workforce affect us all. Together, they provide a path toward better working lives and better retirement security for all Americans.

Introduction: Is Working Longer in Jeopardy?

by Lisa F. Berkman and Beth C. Truesdale

Introduction Summary

On average, Americans live longer and healthier lives than they did 50 years ago and substantially longer than when Social Security was created in the 1930s. Many policymakers and academics think it is logical—almost inevitable—that Americans will spend more of these years in the paid labor force. Longer life expectancies mean that Americans need income to support more years of life, and working longer is a commonly proposed solution. In this chapter we provide evidence that large and growing economic and social inequalities, coupled with changes across generations or birth cohorts, call for a rethinking of the working-longer policy framework. In the first section of this introduction, we outline trends and inequalities in American demographics, health, family dynamics, jobs, and politics, because the evidence in these five areas—well-known to researchers in those domains but often neglected in the working-longer conversation—is a key motivation for this book. Then we turn to the new frontiers of research on aging, work, and retirement.

Part One • Who Has a Job? Labor Trends from Commuting Zones to Countries

Chapter 1: "When I'm 54: Working Longer Starts Younger Than We Think"

by Beth C. Truesdale, Lisa F. Berkman, and Alexandra Mitukiewicz

Chapter 1 Summary

Those who are not employed during their 50s—and who may not be candidates for working into their 60s—are frequently invisible in the "working longer" discussion. In this chapter, we bring these individuals back into the conversation by examining who is and is not working in their 50s, the stability of individuals’ employment in their 50s, and their likelihood of working into their 60s. We find that those who lack stable employment during their 50s are disproportionately non-white, women, and those without college degrees. While disadvantaged groups start from a lower base of employment around age 50, working longer appears to be a challenge across the board: employment rates fall by about 20 percentage points for all groups between ages 50 and 60. We also find that continuous employment during one’s 50s appears to be a critical foundation for working longer, but about half of Americans do not have continuous employment during their 50s. Policies that improve the quality and consistency of employment in late middle age may increase rates of working longer.

Chapter 2: "The Geography of Retirement"

by Courtney C. Coile

Chapter 2 Summary

As Americans work longer in response to a changing retirement landscape, it is important to ask whether there are groups being left out of this trend. Geography is a natural lens through which to examine this question, given regional disparities in the employment of prime-age individuals. In this chapter, we explore the geography of retirement. We find large differences across U.S. commuting zones in employment rates at older ages, with a gap of about 20 percentage points between areas at the 90th and 10th percentiles of employment. Compared to high-employment areas, low-employment areas are systematically different, with a less educated and more diverse population, more low-wage jobs and import competition from China, poorer health outcomes and health care access, lower government spending, and more income inequality. Although these correlations are not necessarily causal, collectively these factors can explain about four-fifths of the geographic variation in employment at older ages.

Chapter 3: "The European Context: Declining Health but Rising Labor Force Participation among the Middle-Aged"

by Axel Börsch- Supan, Irene Ferrari, Giacomo Pasini, and Luca Salerno

Chapter 3 Summary

To understand the potential future of working longer in America, we compare trends in health and employment in Europe with those in the United States. While health in Europe improved between 2004 and 2018 among older adults (aged 65 to 85), we find the opposite for middle-aged adults (aged 50 to 64). In this respect, Europe is experiencing negative developments similar to those in the United States. In terms of employment, however, Europe is different than the United States. We do not find any sign that employment rates of middle-aged individuals are stagnating or falling. On the contrary, employment has increased steadily since the late 1990s. It is too early to conclude what implications the stalling health trend of the middle-aged cohorts will have for labor force participation among older Europeans in 10 or 15 years. We argue that economic considerations, such as public pension and disability insurance policies, are likely to continue to have a greater influence on rates of early retirement than health.

Chapter 4: "Planning for the 'Expected Unexpected': Work and Retirement in the United States after the COVID-19 Pandemic Shock"

by Richard B. Freeman

Chapter 4 Summary

This chapter analyzes the implications of the unexpected 2020–2021 COVID-19 pandemic for work and retirement in the United States. The pandemic induced the greatest loss of jobs in the shortest period of time in U.S. history. A slow economic recovery would surely have endangered work longer/retire later policies that seek to adjust the finances of Social Security retirement to an aging population. Boosted by the huge CARES (March 2020) and ARPA (April 2021) rescue packages, the early recovery from the COVID-19 recession was faster and stronger than the recovery from the 2007–2009 Great Recession. Even so, the pandemic greatly altered the job market, with workers suffering from long COVID having difficulty returning to work, and more workers working from home. In its immediate effect and potential long-run impact, the pandemic recession/recovery is a wake-up call to the danger that shocks from the natural world pose to work and retirement. Realistic planning for the future of work and retirement should go beyond analyzing socioeconomic trends to analyzing expected unexpected changes from the natural world as well.

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Part Two • What’s the Fit? Workers and Their Abilities, Motivations, and Expectations

Chapter 5: "The Link between Health and Working Longer: Disparities in Work Capacity"

by Ben Berger, Italo López García, Nicole Maestas, and Kathleen J. Mullen

Chapter 5 Summary

Good health is important for employment at older ages. However, little is known about how health-related functional abilities interact with occupational demands to shape work capacity. Using new data, we quantify individuals’ functional abilities, combine that information with occupation-specific ability requirements, and create new measures of individuals’ potential occupations and earnings. We find that average functional abilities, potential occupations, and potential earnings decline only slightly with age, indicating that many Americans maintain work capacity into their late 60s. Gaps in work capacity by race/ethnicity and gender are small, suggesting health is not a major driver of observed earnings disparities. However, gaps in work capacity by education are large and increase with age, suggesting diminished prospects for working longer among those with less education. Although work capacity among Black respondents improves across cohorts, today’s middle-aged white Americans have lower work capacity than those now at retirement age, suggesting rising rates of work disability as these cohorts age.

Chapter 6: "The Psychology of Working Longer"

by Margaret E. Beier and Meghan K. Davenport

Chapter 6 Summary

Why do some people continue working, while others choose to retire? The economy and job availability shape these decisions, but psychology also plays a role. We describe decisions to work longer as a function of individuals’ skills, their perceptions of their ability to keep working, and their motivation to work. These psychological processes are a function of individual abilities, environmental attributes, and their interaction. We explore what organizations can do to influence workers’ skills, perceptions, and motivations in order to retain older workers. We identify five areas for future research: a focus on working longer as well as retirement; heterogeneity among older workers; how to engage older workers in 21st century jobs; future time perspective as a lever for extending work lives; and how major disruptive events like the COVID-19 pandemic influence the experience of work and decisions to work longer among older workers.


Chapter 7: "Forecasting Employment of the Older Population"

by Michael D. Hurd and Susann Rohwedder

Chapter 7 Summary

Until the COVID-19 pandemic, the employment rate of the older population had increased for more than 25 years. However, two developments besides the pandemic call into question whether this long-term trend will continue: (1) the employment rate of the younger population has remained constant or declined, implying that fewer will still be employed when they reach older ages, and (2) health, an important predictor of retirement at the individual level, has not improved in the pre-retirement age population during the past three decades. We use the subjective probability of working at several future ages as stated by individuals in the Health and Retirement Study to assess future employment trends of the older population. We simulate employment from pre-retirement to post-retirement ages, calibrating the level to the population subjective probability of working. The employment rate predicted for those who will be age 70 or 71 in the early 2030s is almost the same as or slightly lower than the level in 2016, implying that, even in the absence of COVID, the positive trend would not continue. Further, most subpopulations as defined by education, gender, and race/ethnicity will not experience growth in the employment rate, not even those with the most favorable trends in health.

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Part Three • Lived Experience: The Role of Occupations, Employers, and Families

Chapter 8: "Dying with Your Boots On: The Realities of Working Longer in Low-Wage Work"

by Mary Gatta and Jessica Horning

Chapter 8 Summary

For many older workers, retirement, in the traditional sense of a financially secure period of leisure after a lifetime of work, is elusive. This chapter examines the experiences of low-wage older workers who try to stay employed—both for the ready cash and in order to increase their monthly Social Security benefits by delaying claiming—and the economic consequences for those who stop working. Using both quantitative and qualitative methods, we examine the reality of low-wage older workers’ lives. First, we explore how economically secure low-wage older workers would be if they no longer worked, and how this security varies across career income levels, cohorts, and age of claiming Social Security benefits. Then, using ethnographic data, we share the lived experiences of older workers including the challenges they face as they age and the strategies they use to make ends meet at and beyond traditional retirement ages.

Chapter 9: "Ad Hoc, Limited, and Reactive: How Firms Respond to an Aging Workforce"

by Peter Berg and Matthew M. Piszczek

Chapter 9 Summary

The economic and social consequences of population aging depend in large part on how employers respond to an aging workforce. Although previous research offers aspirational suggestions about what management and labor organizations should do to help older workers, remarkably little is known about what they are actually doing to manage an older workforce. We use both survey data and in-depth qualitative interviews at manufacturing firms to explore the organizational response to workforce aging in the United States and Germany. We find that organizations do not see workforce aging as a major threat to human capital. As a result, organizational responses are largely ad hoc, limited, and reactive. They tend to focus on strategically important workers, thus increasing occupational inequalities in retirement flexibility. However, we also find that older workers in Germany have more flexibility in later-working lives than those in the United States due to institutional differences in worker representation, working time arrangements, and social policy, demonstrating that productive responses to workforce aging are possible.

Chapter 10: "How Caregiving for Parents Reduces Women’s Employment: Patterns across Sociodemographic Groups"

by Sean Fahle and Kathleen McGarry

Chapter 10 Summary

This chapter examines the social patterns of elder caregiving among women ages 50 and older in the United States. We find that women who provide personal care for parents or parents-in-law tend to be from more advantaged sociodemographic groups, with larger differences by socioeconomic status than by race and ethnicity. Prior to initiating care, caregivers also have greater labor market attachment than non-caregivers. In contrast, although less likely to provide care, women from less advantaged groups tend to provide more time-intensive care when they do provide care, particularly in the extreme upper-end of the distribution of care hours. We find strong negative associations between caregiving and employment, hours, and earnings, both immediately and over a longer 10-year period. The relationship between care and work is similar across the sociodemographic groups that we examine.


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Part Four • Politics and Policy: Where Population Aging Meets Rising Inequality

Chapter 11: "Working Longer in an Age of Rising Economic Inequality"

by Gary Burtless

Chapter 11 Summary

In the past four decades, rising earnings inequality has substantially widened income disparities among working-age families. This chapter investigates the relationship between rising inequality during Americans’ prime working years and the simultaneous trend toward longer work lives. I find that both trends have increased inequality in the population past age 65. Higher earned income inequality before 65 pushes up inequality after 65, because high-wage workers accumulate greater wealth and more pension credits than workers who earn less. Moreover, the trend toward later retirement is more pervasive among high-wage than among low-wage workers, a pattern that tends to boost the relative incomes of the high-income elderly. Despite the factors driving up old-age inequality, income disparities in old age have increased notably less than disparities in the working-age U.S. population. This is primarily the result of much stronger government social protection for Americans past age 65 compared with the population under 65.


Chapter 12: "How Does Social Security Reform Indecision Affect Younger Cohorts?"

by John B. Shoven, Sita Nataraj Slavov, and John G. Watson

Chapter 12 Summary

The Social Security trust fund will be exhausted in the early 2030s. The U.S. government will need to make a choice about how to address the impending trust fund exhaustion, but it is unclear what it will choose to do. This indecision leaves young and middle-aged workers not knowing whether they will face Social Security benefit cuts, payroll tax increases, or an increase in the full retirement age. This uncertainty about what will happen in the future causes young and middle-aged cohorts who are saving for retirement to make mistakes that could be avoided if the government decided earlier what will happen when the trust fund runs dry. This paper examines the cost of government indecision on Social Security reform. We calculate the value that people in different income classes and different birth cohorts would receive if the government decided now what it will do when the trust funds are exhausted. We find that the cost of indecision can be large. In some cases, the value of knowing today what the policy change will be in 2035 is worth more than two months of labor market earnings.

Chapter 13: "The Biased Politics of 'Working Longer'"

by Jacob S. Hacker and Paul Pierson

Chapter 13 Summary

Why has there been such a limited response to the strains facing older Americans? The answer can be found in America’s “organized political economy,” the interaction of organized political actors and the distinctive structure of U.S. political institutions. This interaction has created three biases that have reduced responsiveness to older voters’ policy concerns, despite these voters’ centrality to the electoral coalition of the Republican Party: (1) a bias toward economic elites hostile to social spending and taxation; (2) a bias toward legislative gridlock caused by the “asymmetric polarization” of the parties, as Republicans have become a much more conservative force; and (3) a bias toward racial and cultural appeals, rather than ones addressing economic risks, as the GOP’s main means of gaining and holding power in a diversifying society. These three biases have pulled both parties toward the concerns and attitudes of the affluent. Their most profound effects, however, have been on the Republican Party. All three of these biases have encouraged Republicans to pursue hard-right positions unpopular even among their own base, hamstringing collective efforts to address the challenges facing older Americans.

Chapter 14: "What Is the Way Forward? American Policy and Working Longer"

by Lisa F. Berkman, Beth C. Truesdale, and Alexandra Mitukiewicz

Chapter 14 Summary

While aging populations are inevitable in most countries around the world, policy responses to these aging populations are a matter of choice. Our central argument is that policies affecting work—those that shape labor markets for workers of all ages—must be considered in tandem with policies affecting retirement. Rising inequalities make it much harder to respond effectively to population aging. For U.S. policy design, large gaps in economic and social conditions—gaps defined by socioeconomic status, race/ethnicity, gender, family configuration, geography, and more— mean that one size will not fit all when it comes to work and retirement. We offer five main conclusions. (1) Working longer is an important but incomplete response to population aging. (2) High and rising social and economic inequalities put working longer in jeopardy for many Americans. (3) Robust retirement and disability policies are essential complements to working-longer policies. (4) Working-longer policies must be supported by “good jobs” policies to succeed. (5) Responses to population aging must take into account the needs of today’s middle-aged Americans, who are the retirees of the future, as well as today’s older Americans. In this closing chapter, we propose an array of policies to improve the well-being of older Americans as they work and retire.