Chapter 10

Work and Retirement

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 Chapter Outline
Trends in labor force participation
The transition from work to retirement
Factors affecting labor force withdrawal
Being retired

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Table 10.1 - Labor Force Participation
Rates by Age and Gender, 1990,
2000, and 2010
1990 2000 2014
Men
45 to 54 90.7 88.6 85.6
55 to 59 79.9 77.1 76.8
60 to 64 55.5 55.0 61.9
65 to 69 26.0 30.3 36.1
70 to 74 15.4 18.0 22.8
75 to 79 9.5 10.7 14.5
Women
45 to 54 71.2 76.8 73.8
55 to 59 55.3 61.4 66.4
60 to 64 35.5 40.2 50.2
65 to 69 17.0 19.5 27.5
70 to 74 8.2 10.0 15.6
75 to 79 3.9 5.3 12.0

Source: U.S. Bureau of Labor Statistics (2015).

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 Racial and Ethnic Differences in
Labor Force Participation
Over the life course, there are racial and ethnic
differences in employment histories, which
translate into different patterns of work in later
life
Black men have lower rates of labor force
participation than white, Asian, and Hispanic
men

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Employment Histories of Black Men
Much of the decline in work among black men
reflects higher rates of disability
• Black men are more than twice as likely as white
men to suffer from hypertension, circulatory
problems, diabetes, and nervous disorders
• They are also more likely to take up physically
strenuous jobs where chronic health problems
make work difficult or impossible

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 Employment Histories of Minority
Women
Hispanic women have the lowest rates of labor
force participation
White women are most likely to be in the labor
force in their early 60s, but among women 65
and older, there are only minimal differences by
race or ethnicity

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International Trends in Labor Force
Participation (1 of 2)
Most European countries also experienced a decline
in labor force participation among older men in the
1980s
• This trend was a result of specific policies adopted by
European countries to reduce high unemployment
among younger workers by encouraging early
retirement
• As the costs of public programs grew, European
countries became concerned about the culture that had
been encouraged in the 1980s
• By the 1990s, most of these countries began to seek
measures to encourage workers to remain employed

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International Trends in Labor Force
Participation (2 of 2)

© Realistic Reflections RF

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Transition from Work to Retirement
Bridge jobs: Jobs that help make the
transition from work to retirement
Phased retirement: Any arrangement that
allows older workers to reduce their
responsibilities and ease gradually into full
retirement
Contingent work: An arrangement in which
workers are hired on a temporary basis to do a
specific task

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Economic Incentives Affecting Labor
Force Withdrawal (1 of 2)
Social Security benefits
• Early retirement is allowed at age 62
• Because Social Security benefits will continue to
increase up to age 70, it is clear that people are
ready to wait for their benefits
Disability Insurance
• Many people who retire before they reach age 62
do so because they are unable to continue
working

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Economic Incentives Affecting Labor
Force Withdrawal (2 of 2)

Shift from defined benefit to defined

contribution pension plans
• Defined benefit (DB) plan
• Pays a specified amount when a worker reaches
a given age
• Defined contribution (DC) plan
 A savings plan with some tax advantages
• The longer one works, the higher the potential
benefit

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 Factors Affecting the Individual
Retirement Decision
How people feel about their jobs
Health
Need for income
Family responsibilities
• Joint retirement is when a couple retires at the
same time
• Sequential retirement is when one member of a
couple retires before the other

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 Factors Affecting Retirement
Satisfaction (1 of 2)
Good health
• People who are in poor health tend to engage in
more passive activities than those who are in
good health
• Those in the poorest health are least active
Adequate income
Family status plays a role
• People who are married have more positive
attitudes in retirement, higher satisfaction with
retirement, and better adaptation to retirement
than unmarried people
Preretirement planning
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Factors Affecting Retirement
Satisfaction (2 of 2)

© Comstock Images/PunchStock RF

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 Patterns in Volunteering
Since the 1970s, Americans have worked on
fewer and fewer community projects
In the last quarter of the twentieth century,
volunteer work among older people nearly
doubled, from an average of 6 times a year to 12
times a year
• Among people over age 75, volunteering increased
140 percent

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 Religious Participation (1 of 2)

In general, religiosity tends to increase with age

Women tend to be more involved than men in
religious organizations and to state that prayer
is important to them
Older African Americans are more likely than
whites to be involved in a variety of religious
activities

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 Religious Participation (2 of 2)

Religion can:
• Improve health and reduce disability
• Increase self-esteem
• Reduce symptoms of depression
• Enhance life satisfaction

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 End of Presentation

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10-18
reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.