Do Older Workers Face Greater Risk of Displacement?

Alicia H. MunnellMauricio SotoNatalia A. Zhivan Steven A. Sass

IB#53

Introduction

The employment of older workers into their mid-60s will be critical to ensuring that they enjoy a secure retirement. Continued employment provides current income while working, avoids the actuarial reduction in Social Security benefits, allows 401(k) accumulations to increase, and shortens the period of retirement those assets must support. One of the risks threatening the ability to work to older ages is being “displaced,” with displacement defined as the elimination of the worker’s job due to a shift in the demand for labor. Displacement can easily throw 50-year-old workers off course, disrupt their retirement saving plans, and possibly lead to premature retirement…