Do State Economics or Individual Characteristics Determine Whether Older Men Work?
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...
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Alicia H. Munnell is the Peter F. Drucker Professor of Management Sciences in Boston College’s Carroll School of Management and Director of the Center for Retirement Research at Boston College (CRR). Mauricio Soto is a research associate at the Urban Institute. Robert Triest is a Senior Economist and Policy Advisor at the Federal Reserve Bank of Boston. Natalia A. Zhivan is a graduate research assistant at the CRR. This brief is based on a longer paper (Munnell et al. 2008).