Later Retirement and Closing the Deficit

Closing the Deficit

How Much Can Later Retirement Help?

Who chooses to delay retirement? Have older workers delayed their departure from career jobs? How will working longer affect the outlook for the federal budget?

For the past two decades Americans over age 60 have increasingly delayed their withdrawal from the workforce, a reversal of a century-old trend toward early retirement. For instance, from 1991 to 2010 the employment rate increased by more than half among 68-year-old men and by about two-thirds among women of the same age.

Using data from the Current Population Survey, Closing the Deficit explores the historical trajectory of retirement and the labor force participation rate of older men and women. Brookings economists Henry Aaron and Gary Burtless join with renowned colleagues to examine the impact of extended employment against the backdrop of the federal deficit problem. They posit that working longer could help reduce the soaring costs of entitlement programs including Social Security and Medicare.

Aaron and Burtless have also developed new evidence on the role of career jobs. This evidence suggests that lengthening the careers of older workers who have held their jobs for a decade or more significantly contributes to the trend toward later retirement.

As the nation faces a prolonged jobs gap, Closing the Deficit provides an important work on a crucial segment of the employment market and guides us toward a path for future recovery.

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Closing the Deficit is available in both hardcover and eBook formats: