We may be witnessing the last gasp of early retirement — not just in the United States but in many industrialized countries. Considering the high unemployment since the 2008 financial crisis, you might expect the opposite. Early retirement would flourish. It would strike many unemployed older workers as the path of least resistance. Can't get a job? Retire instead. Surely this has happened, but it's being diluted by a determination to work longer. Early retirement is in retreat.
So finds a new study of 20 advanced countries done by economists Gary Burtless and Barry Bosworth of the Brookings Institution, a think tank. Excluding countries with depression-like unemployment — Greece, Portugal, Spain and Ireland — all these nations have experienced higher labor force participation by older workers since 2007. Some gains are startling. In Germany, the share of the 60-to-64 population with jobs went from 33 percent in 2007 to 47 percent in 2012; in the Netherlands, from 30 percent to 44 percent.
This continues a trend of working longer that started in the 1980s and 1990s. In the U.S., 52 percent of the 60-to-64 population held jobs in 2012, the same as in 2007. But the share of older people with work or searching for a job — the broad definition of "labor force participation rate" — has continued to rise. Translation: a shrinking share of older Americans are dropping out of the labor force and relying exclusively on retirement benefits and savings.