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Well-educated and still working

By Jennie L. Phipps · Bankrate.com
Wednesday, September 11, 2013
Posted: 2 pm ET

The older you were during the Great Recession, the less likely it was that your employer would lay you off. As the economy has turned around, workers older than age 60 who survived the economic slowdown continue to have what Brookings Institution economist Gary Burtless terms "low quit rates."

In other words, workers past 60 are hanging onto their jobs, and employers are inclined to encourage them to stay because these workers tend to be well-educated and productive.

This is a relatively new phenomenon -- one that started, Burtless says, in the late '80s and early 1990s. Before that, workers were choosing retirement earlier and earlier.

In a report for the Center for Retirement Research at Boston College, Burtless links this delay in retirement to education levels. He pointed out that in 1985, only 15 percent of men between the ages of 60 and 74 had earned college degrees and 40 percent hadn't finished high school. By 2011, the number of men with degrees doubled to 32 percent and only 13 percent had failed to finish high school.

Burtless says the improvement in education levels among men is flattening, but among women, education levels continue to increase because older boomer women tend to be less educated than older boomer men. That changed among younger boomers, with more women finishing college. Today, women outnumber men in college and graduate programs.

What does this mean for retirement planning? Burtless says that in an economy that isn't growing fast enough to give a job to everybody who wants to work, it could contribute to lingering unemployment among younger people. He says workers older than 60 who aren't leaving the workforce reduce the number of jobs for people younger than 40 and make it particularly difficult for workers younger than 25 to get their first career positions.

"When someone 60 leaves his job, it is more likely that he is leaving the job market forever. That opens up a job vacancy for a younger person to fill. The population past 60 that continues to work is certainly taking jobs away from those younger than 25," Burtless says.

Burtless doesn't think there is much evidence that things will always be this way. He points to the Great Depression, which lasted about 12 years -- until the workforce had to gear up to fight World War II. When unemployment falls to somewhere near 4 percent, then, "There is a niche for nearly everyone who wants to work," he says.

For that to be the case in this economy, we need to add another 7 million to 7.5 million jobs, Burtless calculates. While the country appears to be a long way from that, he believes things will eventually right themselves because of underlying productivity among U.S. workers. "My bias as an American is that things will improve. In the long run, I think that employers gravitate toward places where workers are productive and can be more productive down the road," he says.

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