Do State Economics or Individual Characteristics Determine Whether Older Men Work?

Alicia H. MunnellRobert K. TriestMauricio Soto Natalia A. Zhivan

IB#8-13

Introduction

The difference in labor force participation rates of men aged 55-64 across the United States is astounding.  For example, West Virginia has a participation rate below 60 percent, while South Dakota has a participation rate approaching 90 percent (see Figure 1).  This fact in itself has significant implications for the pressures that states will face as the baby boom starts to retire in the face of a contracting retirement income system, declining housing prices, and a lackluster stock market.

Despite these marked differences, little is known about the reasons for such variations in work patterns.  An earlier brief, using the Current Population Survey for the period 1977-2007, demonstrated that the differences in the labor force participation of older men were related to labor market conditions, the nature of employment, and the employee characteristics in each state as well as to a “pseudo replacement rate.”  These variables explained more than one-third of the total variation…