Now, keep up to date
with daily feeds of newly posted stories
about America's Seniors...click on the box
Security Benefits keep older men in
The decline in the
Social Security benefits for workers who
recently reached their 60s has been the
leading cause of the trend toward delayed
retirement of older men, a new national
Between the periods of
1988-1992 and 2001-2005, there was a 4.7
percentage point increase in the number of
men aged 55 to 69 in the workforce.
The new study found
that between 25 and 50 percent of that
increase can be explained by declining
Social Security benefits, said
David Blau, co-author of the study and
economics at Ohio State University.
don’t get the same level of Social Security
benefits when they retire as they once did,
and that has been one reason why a
significant number of men continue to work
longer than they otherwise might have,” Blau
These results give a
glimpse of what may happen if the federal
government opts to further decrease benefits
to shore up Social Security’s bottom line,
as many experts expect.
“This issue is very
important because Social Security is in
financial imbalance, and one way to correct
that imbalance is for people to work longer
and delay receiving their benefits,” Blau
“These results suggest
that less generous benefits have the desired
effect of inducing people to work longer.”
Blau conducted the
study with Ryan Goodstein of the
Federal Deposit Insurance Corporation.
Their study appears in a recent issue of
The Journal of Human Resources.
The researchers use
data from a variety of sources, including
the Social Security Administration, the
Current Population Survey and the
Survey of Income and Program Participation.
With this data, they were able to look at
labor force participation of men aged 55 to
69 between the years of 1962 and 2005.
One contribution of
this study is that it looks at labor force
participation rates for more than 40 years,
so that long-term trends can be identified
and explained, according to Blau. In
addition, the study looked at a wide range
of factors, in addition to Social Security
benefits, that could explain why older men
leave or stay in the labor force, such as
changes in company pensions, retiree health
insurance, and the large increase in
employment of older women.
The average age of
retirement declined during most of the
period of the study, from the early 60s to
the late 80s. This was a continuation of a
trend that dates back at least to 1900.
This research, like many previous studies,
could not identify the major reasons for
this decline, Blau said. Results suggest
that rising generosity of Social Security
benefits offered during this time played a
role in men retiring early, but it was not
the main story.
speculate that a general rise in living
standards and well-being led people to value
leisure more and gave them the opportunity
to retire earlier, he said.
While the main reasons
for the declining retirement age from the
60s to the 80s remain unknown, Blau said the
results are clear that new Social Security
rules put in place in the 1980s have pushed
men to stay in the workforce longer – even
after changes in workplace pensions, retiree
health benefits and other factors are taken
Between the periods of
1988-1992 and 2001-2005, the share of men
aged 55 to 69 in the workplace rose from
54.6 percent to 59.2 percent, an increase of
4.7 percentage points. Results suggest from
one-quarter to one-half of that increase may
be explained by declining Social Security
benefits, depending on how the researchers
took into account other factors.
ages had been declining in the United States
for decades, so a turnaround like we saw
beginning in the late 80s is a significant
change,” Blau said. “It’s clear that
changes in Social Security benefits played a
major role in that turnaround.”
The study identified
two Social Security changes in particular
that have led older men to work longer: the
increase in the full retirement age beyond
age 65, and the financial incentives offered
to older workers to delay retirement even
beyond the full retirement age.
“These two features of
Social Security that were changed in 1983
played a substantial role in persuading men
to work longer,” Blau said.
But while changes in
benefits played the largest role in leading
men to delay retirement, the study found
these changes weren’t the only reasons.
One important factor
identified by the study was the increasing
number of older married women in the
workforce. In the early 1960s, there
weren’t many older women working outside the
home, but that number has increased
substantially over time.
How does that affect
men’s retirement? Blau noted that men tend
to be a few years older than their wives,
and if couples want to retire at the same
time, husbands often have to work a few
years longer than they otherwise might.
The final important
factor in later retirement ages was the
increasing education levels of older men.
In the early 1960s, the period first covered
by this study, the majority of older men in
the workforce were high school dropouts.
But by the 2000s, dropouts were a small
Other studies have
shown that more highly educated people tend
to retire later than those with less
education, so it is no surprise that more
people are retiring later these days.
He noted that the
United States is not alone in seeing these
changes in retirement patterns. Western
European countries and Japan also saw the
drop in retirement ages until the late 80s
and early 90s, and then a steady increase
Nearly all these
countries have experienced the same
demographic trends and social security
trends that encouraged workers to retire
earlier, at least up to the late 80s,
according to Blau. Now, a decline in
fertility rates in advanced economies has
left fewer younger workers to support
retirees, and has resulted in reduced
benefits in government programs like Social
Security and workers staying on the job
The big question is
whether the trend toward later retirement
will continue, Blau said. The education
effects found in this study are unlikely to
play a major role in the future, and the
effects of older married women in the work
force may continue to push men’s retirement
back further, but only marginally.
The biggest impact will
continue to be changes in Social Security
benefits, he said.
The full retirement age
for Social Security will increase from 66 to
67 for workers born in 1960 and later, so
that may induce older workers to remain
employed longer. After that, no major
changes are in store for Social Security
benefits – at least for now.
“Most experts think it
is inevitable that there will be further
reductions in Social Security benefits to
keep the program financially balanced,” Blau
said. “Those changes may very well lead to
even later retirements.”
The study was supported
by a grant from the
National Institute on Aging.