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April 1989, Vol. 112, No. 4
Institutional barriers to employment of older workers
Diane E. Herz and Philip L. Rones
Retirement ages have fallen steadily since World War II. Early retirement, a term often used to describe labor force withdrawal prior to age 65, has become the norm. By age 62, almost half of all men are out of the labor force (they are neither working nor looking for work), and by age 64, three-fifths are "retired" by that definition.1
The trend toward early retirement has generally been regarded as a positive one, as it primarily reflects improvements in retirement resourcesSocial Security, pensions, and wealth. Some retirements, however, may not be strictly voluntary; rather, they may be in response to actual or probable job loss, or to a lack of acceptable job opportunities for older workers. These retirements may be voluntary only to the extent that leaving the labor force is the best available option. Some workers might prefer another choice either phased retirement or a "second career" upon job loss or pension acceptance. But this choice is often not feasible because of institutional rules and job market realities. Usually, workers must choose between continued full-time employment (during which some pension benefits often are lost), part-time work for relatively low wages, or complete retirement. Given these limitations, many workers choose complete retirement.
Anticipating a dramatic decline in the ratio of workers to retirees as the baby-boom generation becomes eligible for retirement early in the next century, Federal policy has been directed toward encouraging workers to extend their worklives.2 Social Security regulations have been altered to encourage later withdrawal from the labor force, and mandatory retirement has been prohibited regardless of age. Also, researchers are examining ways in which work schedules and environments could be designed to address the needs and desires of older persons.
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1 The concept of retirement is more complex for women. That is because women in their fifties and sixties today often had very little work experience throughout their lives. As a result, they often do not choose a retirement age based on their own work history or pension resources. Labor force participation rates for women ages 65 and over have followed the same trend as those for men -they have declined from a high of about 11 percent in the early 1960's to about 7 percent today. Participation rates for women ages 55 to 64 have changed little over the last two decades.
2 John A. Svahn and Mary Ross, "Social Security Amendments of 1983: Legislative History and Summary of Provisions," Social Security Bulletin, July 1983, pp. 3-48. See Older Americans in the Workforce: Challenges and Situations (Washington, Bureau of National Affairs, Inc., 1987). Also see appendix: Text of the Age Discrimination in Employment Act of 1967, as amended. The 1986 amendments removed the upper limit (which had been age 70) in the law's proscription against age discrimination.
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