100 90 CHART 3-1 LIFECYCLE DISTRIBUTION OF EDUCATION, LABOR FORCE MEN NOTE: Data for 1980 is based on 1977 work life estimates. SOURCE: Senate Special Committee on Aging based on data from the U.S. Bureau ofthe Census, U.S. Bureau for Labor Statistics, and the Upjohn Institute for Employment Research Although, on the average, males spent 5 more years in the labor force in 1980 than in 1900, their working lives accounted for a smaller proportion of their lifespan in 1980 (55 percent), than in 1900 when males spent 69 percent of their lives working. The number of years spent in school also increased for males from an average of 8 years to 12.6 years between 1900 and 1980. The proportion of time devoted to education, however, only increased from 17 to 18 percent. Change in distribution patterns of major life activities are very different for women. As more women have entered the labor force, an historic increase has taken place in the proportion of time spent in work outside the home. Since 1900, the average number of years women spend in the labor force increased from 6.3 to 27.5 years and from 13 percent of the lifespan to 36 percent. (NOTE. The data for labor force participation of women is necessarily skewed by the fact that, historically, women have worked within the home and have tended to interrupt their work during child-rearing years. Dramatic reductions in such interruptions are reflected by a decrease in the proportion of time women spend in retirement or work at home (60 percent in 1900 compared to 42 percent in 1980). A major factor influencing the surge in labor force participation for women is an increase from 2 to 13 years since the early part of the century in the average period of time left after child-rearing.) B. RETIREMENT MOST OLDER WORKERS RETIRE EARLIER THAN AGE 65 Since Social Security legislation was passed in 1935, age 65 has been commonly thought of as the "normal" retirement age. Today, however, most retirees leave work before they reach age 65. A 1978 national survey of American attitudes toward pensions and retirement found that almost two-thirds of retirees had left work before age 65.1 The median age of retirement in this sample was 60.6. It is important to note that retirement is not necessarily synonymous with lack of employment. At the time of the survey, however, 81 percent of the retired respondents were not employed full time. Early retirement may be a permanent fixture of the American economy. Even an increase in the eligibility age for full Social Security benefits and the elimination of mandatory retirement at age 70 is likely to have only minimal impact on future retirement ages. According to the National Commission for Employment Policy, research has shown that changing the age of eligibility for full Social Security benefits from age 65 to 67 by the year 2027 would have a minimal effect on the actual age of retirement and would only raise the average retirement age by about 3 months.2 The study projected that other options, such as reducing early retirement benefits, would also have little effect on retirement age. According to the results of the study, people retire at a given age for a variety of reasons such as health, availability of private pension benefits, social expectations, and long-held plans. Apparently, Social Security benefits are only a small factor in the retirement decision. 1 Harris, Louis and Associates. A Nationwide Survey of Employees, Retirees, and Business Leaders, 1979. 2 Fields and Marshall. Restructuring Social Security: How Will Retirement Ages Respond? National Commission on Employment Policy. Summer 1983. C. LABOR FORCE PARTICIPATION LABOR FORCE PARTICIPATION RATES DECLINE WITH AGE Cross-sectional data demonstrates that the labor force participation of men and women declines steadily among older age groups (table 3-1). In the third quarter of 1986, 88.9 percent of men age 50 to 54 and 61.5 percent of women in this age group were in the labor force. By age 60 or 61, only about 69 percent of men and 41 percent of women were with the labor force. Among those 70 and older, only about 10 percent of men and 4 percent of women were in the labor force. (NOTE.-People are considered to be a part of the labor force if they are either currently employed or unemployed but actively seeking work.) TABLE 3-1.-LABOR FORCE PARTICIPATION BY AGE AND SEX, THIRD QUARTER 1986 Note: The U.S. labor force includes workers who are employed and actively seeking employment. The participation rate is the percentage of individuals in a given group (e.g., age group) who are in the labor force. Source: U.S. Department of Labor, Bureau of Labor Statistics. Current Population Survey, unpublished. (NOTE. This data presents a picture of specific age groups at one point in time and does not necessarily imply a trend that follows the aging process specifically.) Workers who are age 55 to 64 make up close to 10 percent of the total U.S. work force, while 65-plus workers make up about 2.5 percent. In the third quarter of 1986, there were about 12 million workers age 55 to 64 (6.9 million men and 5 million women) and 3 million workers age 65-plus (1.8 million men and 1.2 million women). THE LABOR FORCE PARTICIPATION OF OLDER WORKERS IS CONTINUING TO DECLINE The labor force participation of elderly men has dropped rapidly over the last 30 years (chart 3-2). In 1950, almost 50 percent of all elderly men were in the labor force; by 1960, this figure had dropped to 33 percent and, by 1970, to 25 percent. By the third quarter of 1986 only 16 percent of elderly men were in the labor force (table 3-1). The drop is due in part to an increase in voluntary early retirement and a drop in self-employment. The decrease in male labor force participation extends even to men in their fifties. Between 1960 and 1986 the labor force participation rate among males aged 55 to 59 had dropped to less than 79 percent from its early level of almost 92 percent. SOURCE: U.S. Bureau of the Census and the Bureau for Labor Statistics TABLE 3-2.-LABOR FORCE PARTICIPATION RATES BY AGE, SEX, AND RACE, THIRD QUARTER 1986 Labor force participation of elderly women has varied only slightly (chart 3-3). In 1950, about 10 percent of elderly women worked and by the third quarter of 1986 the percentage had dropped slightly to 8 percent. For women over the age of 70, labor force participation dropped from 6 percent to 4 percent between 1950 and 1986. Over the same period, preretirement age women in the 55 to 64 age group have increasingly joined the work force: In 1950, only 27 percent of women in this age category worked, but by 1986 the proportion had risen to 43 percent. This is in marked con trast to labor force trends among men in the same age group and reflects the overall increase in labor force participation among women in general. SOURCE: U.S. Bureau of the Census and the Bureau for Labor Statistics Historically, labor force participation for black women has been much higher than for white women. Over the last 30 years, however, the rates have converged so rapidly that, in the third quarter of 1986, only about 1 percentage point separated the two groups (8 percent for elderly white females and 9 percent for elderly black females). The extent of labor force participation for older black males (13 percent) is lower today than the rate for older white men (16 percent), and it has fallen more rapidly in recent years. OCCUPATIONAL TRENDS ARE SHIFTING TO SERVICE AND LIGHT The U.S. economy has been shifting from agriculture and heavy industry to service and light industries. Labor force trends among older workers have mirrored this trend. In 1986, almost three-quarters of elderly workers were in managerial and professional; technical, sales and administrative support; and service occupations (tables 3-3 and 3-4 and chart 3-4). This shift from physically de |