Recessions and Older Workers

Introduction to Paper:

With the economy sliding ever deeper into recession, questions arise about how older workers are faring and how their fate relative to younger workers compares to the past.  The answer to these questions turns out to be a little complicated.  Two forces are at work.  On the one hand, labor force participation among older workers has been rising since the early 1990s, a reversal of the long-standing trend toward ever-earlier retirement.  Participation rates among older workers have even continued to rise during both of the recessions in this decade – a dramatic change from previous experience.  On the other hand, the edge that older workers used to have relative to younger workers when it comes to layoffs seems to have disappeared, so the rise in the unemployment rate for older workers in recessions now looks similar to that for younger workers.  Of the two forces, the trend growth in labor force participation appears to dominate, which has helped keep the employment rate of older workers from falling during the current recession.  This pattern contrasts sharply with the far more typical decline in employment rates for workers under age 55…

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