As the jobs crisis wears on, with payrolls still 5 million below their pre-recession peak, the share of age 55-and-older Americans working has recovered to near a 42-year high.
Workers under 55 have borne the brunt of the jobs recession, which may mean that its economic effects — due to long-term unemployment, underemployment and stretched household balance sheets — may linger.
Among those 55-and-up, the employment-to-population ratio barely dipped even in the depth of recession and is now higher than at the end of 2007. The ratio among those 25-54 remains about 4 percentage points lower than before the recession started.
For the 65-69 and 70-74 groups, the employed shares are up 1.1 percentage points and 1.6 percentage points, respectively, over the past four years.
Older workers often have the kinds of skills that keeps them valuable in the labor force, if they choose to stay. That choice is clearly driven by a person's calculation of what their standard of living will be if they leave the labor force. Social Security pensions in the United States are designed to supplement income in retirement, but not replace it. The only way to retire successfully is to have saved enough money to do so. Of course, many baby boomers thought they had done this, only to have their savings devastated by the economic crisis brought on by the banking failures. And that is why they continue in the labor force--trying to match up assets with the expected number of years for which they will need a retirement income. Keep in mind that this number of years is steadily growing, which is why younger people today will not receive full Social Security benefits until age 67 (which still may be too young).