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April 1995, Vol. 118, No. 4
Diane E. Herz
I n the 1980's, labor force participation rates for older men leveled off for the first time on the record, suggesting an end to the long-term trend toward earlier retirement. Employers began turning to older workers as a solution to growing labor shortages associated with a long economic expansion and a shrinking pool of young workers. With the onset of a recession in 1990, however, concern about the labor shortages quickly disappeared, and older persons were increasingly seen as a prime target for cost cutting through early retirement buy-outs, as well as lay-offs. Growing numbers of older workers experienced labor market difficulties such as displacement and unemployment. In addition, other work force changes, including escalating health costs, changes in the nature of private pensions, and the continues shift in the types of jobs in the U.S. economy, affected both older and younger workers.
The leveling off of labor force participation rates since the mid-1980's suggests that retirement ages have stopped falling. However, anecdotal evidence tied to corporate restructuring and downsizing has pointed toward a continued decline in retirement ages, due to voluntary retirement, buy-outs, or withdrawal from the labor force following displacement. Clearly, then, analysts need a method of assessing work and retirement issues that goes beyond that typically used with labor force data or administrative statistics (such as data from the Social Security Administration).
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