## April 7, 2011

### Historical Labor Force Participation for People 65 years or Older

My wife mentioned reading something about how people are 'rethinking retirement' which means that they are not retiring and are instead working.   More people are hitting retirement age without enough saved to retire and stop working so more people are working past 65.   I figured in the 'olden day's when people people would have also hit 65 without enough money but would just end up destitute more often as employers wouldn't have wanted to hire older people.  I have this impression that employers would not employ people over 65 in decades past.  Are people working past age 65 a lot more nowadays than in the past?    This lead me to investigate the labor force participation rates for people age 65 and older.

The data
I had to pull data from a few sources to get the picture long term as well as to look at it a couple ways.
The table from the Census Statistical Abstract titled Civilian Labor Force - Percent Distribution by Sex and Age: 1980 to 2009 tells us what % of the labor force is in each age group.  Another table from the Census gives us the Resident Population by Sex and Age : 1980 to 2009.

For older data I also looked at the Census Population by age back to 1900. and the treasure trove of old stuff in the Historical Statistics of the United States Colonial Times to 1970 which has older labor force info in Series D 29-41.  Labor Force, by Age and Sex : 1890 to 1970.   The best data for 1890 to 1970 was in that document.

The results

If you add it all up the information is as follows :

 # over 65 in labor force population over 65 % in labor 1950 3037 12397 24% 1960 3194 16675 19% 1970 3220 20106 16% 1980 3101 25550 12% 1990 3398 31084 11% 2000 4277 34992 12% 2005 5226 36704 14% 2009 6474 39571 16%

Here is the labor force participation rate for the population 65 years or older over the past 60 years :

Now this is for both men and women.    Interestingly the labor force participation rates dropped dropped significantly for men over 65 from 1940 to 1970.   However when you look at the long term trend for women over 65 there has not been as much change in the labor participation rate.

If you look at it split by gender then the difference is considerable.  Here's the summary chart that best shows all the data in one picture:

Men over age 65 used to work a lot more than they do nowadays.
From 1890 to 1990 the percent of men over age 65 who participated in the labor force dropped drastically.   In 1890 the labor force participation rate for men over 65 was over 68% and by 1990 it had dropped to just 16%.   In the 20 years since 1990 the labor force participation for men over 65 has started to inch back up and grew from 16% in 1990 to above 21% in 2009.    I would assume that a significant reason for the decline in labor force participation for men has been from the advent of pension plans and Social Security.   But that is just an assumption on my part.

Women over age 65 have not worked much over 10% historically
Historically from 1890 to 1940 the labor participation rate for women was under 10%.   Then in the 50's through 70's there was a bit of an increase up a little over 10%.   The current 13% participation rate for women over 65 is the highest its been in the history that I looked at.

Turns out I was wrong.  In the 'olden day's men over 65 used to work a LOT more than they do nowadays and older women didn't work much.

Bottom line : The past 20 years has seen an increase in the labor force participation of people older than 65 years.  However in previous decades from 1890 to 1990 the labor force participation rates had been steadily decreasing for men and generally flat for women.