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As the jobs crisis wears on, with payrolls still 5 million below their pre-recession peak, the share of age 55-and-older Americans working has recovered to near a 42-year high.
Workers under 55 have borne the brunt of the jobs recession, which may mean that its economic effects â?? due to long-term unemployment, underemployment and stretched household balance sheets â?? may linger.
Before the financial crisis, economists worried that labor shortages would develop in some occupations as baby boomers left the workforce.
But that's moved to the back burner since the recession began in December 2007. Job holders 55 and up have risen by 3.9 million â?? and fallen by 8.1 million among those under 55, Labor Department data show. It's been 50 months and counting since payrolls peaked, a post-war record. Labor releases the April jobs report on Friday morning.
Some of this shift reflects demographics. Thanks to aging baby boomers, the 55-and-older population has grown by just shy of 10 million since the end of 2007. Meanwhile, those age 35-44 have fallen by 2.5 million.
But that only explains part of the puzzle. Older workers are hanging on to jobs longer, in part because of lost housing wealth and smaller 401(k) balances than they had counted on.
Among those 55-and-up, the employment-to-population ratio barely dipped even in the depth of recession and is now higher than at the end of 2007. The ratio among those 25-54 remains about 4 percentage points lower than before the recession started.
For the 65-69 and 70-74 groups, the employed shares are up 1.1 percentage points and 1.6 percentage points, respectively, over the past four years.
Long-Term Trend
The trend of falling employment as a share of the 54-and-under population and rising employment among those 55 and up has been in force for more than a decade.
Since March 2001, the employed share of those 55 and up has jumped 6 percentage points to 37.9% â?? again largely led by those over 60.
The employed share of those 25-54 has fallen 5.5 percentage points since early 2001 to 75.8%. Among those 16-24, the employed share has fallen by double digits over that period.
For a time, it seemed that the severe recession had broken the trend of more work at older ages. The share of 62-year-olds claiming Social Security benefits at the earliest eligibility age spiked from 27.1% in 2007 to 30.8% in 2009, notes the Urban Institute's Richard Johnson. But the early retiree rate fell to 26.9% last year, the lowest since 1976.
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