The Macroeconomic Environment Faced by Different Cohorts of Older Americans

1. Are Gender Differences Emergingin the Retirement Patterns of the Early Boomers?Kevin E. CahillMichael D. GiandreaJoseph F. QuinnJune 30, 201388th Annual Conference of Western Economics Association InternationalSeattle, WA All views expressed in this paper are those of the authors and do not necessarily reflect the views or policies of the U.S. Bureau of Labor Statistics. The Alfred P. Sloan Foundation supported this research through a grant to the Sloan Center on Aging and Work at Boston College.

2. The Macroeconomic Environment Faced by Different Cohorts of Older Americans The Dow Jones Industrial Average, 1992 – 2012 and Three Cohorts of HRS Respondents, Denoted by Their First Six Years of Survey Participation

3. The Macroeconomic Environment Faced by Different Cohorts of Older Americans Unemployment Rate of the Population 55 Years and Over, 1992 – 2012 and Three Cohorts of HRS Respondents, Denoted by Their First Six Years of Survey Participation

4. Our Paper • Research Questions • Are gender differences emerging in the retirement patterns of the Early Boomers? • If so, is this a break in trend or a temporary blip in the data? • Motivation • Several studies have shown that the timing of retirement is not particularly sensitive to market fluctuations. • Retirement patterns – how people exit the labor force – do appear to be influenced by macroeconomic changes. • Key Findings • Gender differences have emerged with respect to bridge job prevalence among the Early Boomers. • The observed gender differences appear to be the result of broader macroeconomic influences.

5. In recent decades, the labor force experiences of older American men and women have been similar in many ways Labor Force Participation Rates, Actual and Fitted Values, Males Aged 60 to 64, 1964 to 2012

6. Older American women also experienced a break from trend in the mid-1980s Labor Force Participation Rates, Actual and Fitted Values, Females Aged 60 to 64, 1964 to 2012

7. What about gender differences and the retirement process? An illustration of the retirement process

8. Data and Methods • The Health and Retirement Study • A nationally-representative longitudinal dataset of older Americans that began in 1992 • Ongoing with new cohorts and biennial follow-up interviews • Cohorts relevant to our study • HRS Core (51 to 61 in 1992) • War Babies (51 to 56 in 1998) • Early Boomers (51 to 56 in 2004) • Methodology • Define Full-Time Career (FTC) job = 1,600+ hours/year AND 10+ years of tenure • Select respondents who were on a FTC job at the time of their first interview • Examine respondents’ work histories from 1992 to 2010

9. HRS Respondents on a Full-Time Career Job at the Time of their First Interview Percentage of HRS Respondents on a FTC Job at the Time of their First Interview Respondents Aged 51 to 56 at the Time of the First Interview

10. Prevalence of Bridge Jobs by Gender and HRS Cohort Bridge Job Prevalence among HRS FTC Respondents Who Transitioned from Career Employment within Six Years of their First Interview Respondents Aged 51 to 56 at the Time of the First Interview

11. Prevalence of Phased Retirement by Gender and HRS Cohort Percentage of HRS FTC Respondents Reducing Career Job Hours by 20 Percent or More within Six Years of their First Interview Respondents Aged 51 to 56 at the Time of the First Interview

12. Examination of four retirement determinants that could, going forward, potentially lead to gender differences in the retirement patterns of older Americans • The presence of dependent children • Having a parent in need of caregiving assistance • Occupation • Self employment

13. Impact of Having Dependent Children on Bridge Job Prevalence Bridge Job Prevalence by Gender, Cohort and Presence of Dependent Children Men Women

14. Impact of Providing Parental Care on Bridge Job Prevalence Bridge Job Prevalence by Gender, Cohort and Parental Caregiving Men Women

15. Impact of Occupational Status on Bridge Job Prevalence Bridge Job Prevalence by Gender, Cohort and Occupational Status Men Women

16. Impact of Self Employment Status on Bridge Job Prevalence Bridge Job Prevalence by Gender, Cohort and Self Employment Status on the Career Job Men Women

17. Involuntary Transitions from Career Employment Percentage of HRS Respondents Who Left FTC Employment Involuntarily by Type of Transition, Gender, and HRS Cohort Bridge Job Direct Exit

18. Across all three HRS cohorts, there are many similarities with respect to the key determinants of bridge job transitions

19. Conclusions • Older Americans on the cusp of retirement today face a very different economic environment than those in the past. • The latest evidence reveals that the retirement patterns of the Early Boomers resemble those of prior cohorts in many ways. • The retirement patterns of the Early Boomers appear to differ from those of prior HRS cohorts with respect to the role of gender, involuntary transitions, and self employment. • Based on six years of follow-up data, child and parental caregiving, and occupation, all else equal, were not key drivers of retirement transitions among the Early Boomers. • Self employment is a key determinant of retirement transitions, and men and women differ with respect to the prevalence of self employment; however, the large majority of older Americans are wage-and-salary workers.

20. Conclusions (continued) • The gender differences that have emerged in the retirement patterns of the Early Boomers appear to be the result of macroeconomic influences, and not some permanent shift in the retirement experiences of the Early Boomers. • Limitations • The retirement process for the Early Boomers has really only just begun; the Early Boomers were aged 57 to 62 in 2010. • The analysis focuses on individuals with career jobs. • Caregiving can be measured in many ways; alternative measures may uncover important differences by gender. • LFP among older American women continues to increase; the experiences of women in the past might not reflect the experiences of women in the future.