Abstract
<p>The objectives of this article are two fold. Changes in older men’s labor force participation in the United States are first described focusing on human capital and demographic variables. A model of the labor/leisure choice and the retirement decision of older menare then estimated employing Maximum Likelihood Probit. While changes in Social Security Benefit rules are a significant factor in explaining the trend of rising retirement age among older men, the focus here is on additional factors that contribute to older men’s decision to forestall retirement. Probit coefficient estimates for three distinct age cohorts verify the effects of hypothesized determinants of the decision to retire. Specifically, the coefficient on estimated earnings is negative and hasthe largest marginal effect on the decision to retire followed by years of education and retired wife. The effects of wives’ retirement decision will likely influence and forestall the retirement decision of married men as more working women reach retirement age. The rise in labor force participation rates of older men may offset rather than reverse the decline in men’s labor force participation rates that began more than a half century ago.</p>
Highlights
Beginning in the mid-1990s the labor force participation retain the United States of men 55years of age and older began to rise, continuing for almost two decades into the early 2010s (Note 1)
Bureau of Labor Statistics (BLS) beginning in 2001 the largest portion of the labor force, the so called “Baby Boomers”, those born between the years 1946 and 1964, began to move into age cohorts that typically display lower labor force participation
Employing OLS estimates and focusing on Social Security variables, the authors find that changes in the rules governing Full Retirement Age (FRA) and Delayed Retirement Credit (DRC) are the most important factor in the rise in the labor force participation of older men, explaining 25 to 50 percent of the increase, with 16 percent attributed to the increased labor force participation of married women (Note 6)
Summary
Beginning in the mid-1990s the labor force participation retain the United States of men 55years of age and older began to rise, continuing for almost two decades into the early 2010s (Note 1). Employing OLS estimates and focusing on Social Security variables, the authors find that changes in the rules governing FRA and DRC are the most important factor in the rise in the labor force participation of older men, explaining 25 to 50 percent of the increase, with 16 percent attributed to the increased labor force participation of married women (Note 6).
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