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Aging Workforce Drives Job Growth

The unemployment rate has dropped since 2010 for two reasons: first, many Americans under 55 became discouraged and stopped looking for work; second, the number of older workers over 55 who have not retired has increased, accounting for most post-recession job growth. While the over-55 cohort is growing due to aging into that category rather than increased hiring, their continued participation is helping employment levels remain steady as the under-55 population has fewer workers than a decade ago.

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22 views1 page

Aging Workforce Drives Job Growth

The unemployment rate has dropped since 2010 for two reasons: first, many Americans under 55 became discouraged and stopped looking for work; second, the number of older workers over 55 who have not retired has increased, accounting for most post-recession job growth. While the over-55 cohort is growing due to aging into that category rather than increased hiring, their continued participation is helping employment levels remain steady as the under-55 population has fewer workers than a decade ago.

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Bianco Research, L.L.

C For the week of June 11, 2014 4


An Aging Workforce
Brookings Slow but Steady: U.S. Job Market Continues
to Improve
There is another reason the unemployment rate has dropped
3.7 percentage points since reaching a peak in October 2010,
however. Many Americans under 55 became discouraged by
their prospects of finding a job and have stopped looking for
work or have delayed their entry or re-entry into the workforce.
Since the end of the last economic expansion in 2007, the labor
force participation rate has fallen 3.2 percentage points. Almost
half the decline occurred in the past 36 months, even though
private-sector and total payrolls have been rising steadily.
Comment
Brookings points out an interesting trend few are talking about.
The next two charts, which differ only in their starting points,
show job growth broken down by age. The over 55 cohort
accounts for almost all post-recession job growth, as shown in
the first chart below. As the second chart shows, the under 55
cohort has fewer workers now than they did 10 years ago.
The over 55 category is not growing because companies are
hiring this cohort at a faster rate. Rather, this measure is
growing relatively faster because early 50s employees are
aging into the over 55 cohort and not retiring at the same rate
they did before the onset of the Great Recession.
So, in addition to the participation rate driving the
unemployment rate lower, we can thank older workers refusal
to retire for keeping employment levels up.
Cumulati ve Jobs Added Since January 2004
May-14
10.49
May-14
-3.15
-8
-6
-4
-2
0
2
4
6
8
10
12
1
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3
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5
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6
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All Workers Under Age 55
All Workers Over Age 55
Cumulati ve Jobs Added Si nce January 2004 to May 2009
May-09
5.417
May-09
-3.641
-4
-3
-2
-1
0
1
2
3
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5
6
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9
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All Workers Under Age 55
All Workers Over Age 55

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