Job Polarization and Labor Market Outcomes for Older Workers

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Numerous studies have found that even as employment growth in high- and low-skill occupations has been robust, employment in middle-skill occupations such as office administration and manufacturing is in long-term decline. The timing of this decline could not be worse for the older workers looking to prolong their careers to compensate for decreasing Social Security and pension income. But few existing studies have examined the consequences of job polarization on older workers, who may be less likely than prime-aged workers to find work in high- or low-skill occupations. This paper uses the Survey of Income and Program Participation to investigate employment outcomes specifically for older workers first observed in middle-skill jobs. If they leave a middle-skill job, are they able to find jobs in another skill level, or are they forced out of employment prematurely? What are the circumstances surrounding these transitions, and how are the workers’ earnings affected?