Accounting for Trends in the Labor Force Participation Rate of Older Men in the United States

Ryan Goodstein, University of North Carolina at Chapel Hill

After nearly a full century of decline, the Labor Force Participation Rate (LFPR) of older men in the U.S. leveled off in the 1980s and began to increase in the late 1990s. We use synthetic panel data from 1962 to 2005 to model the LFPR of older men in order to explain for these trends. We find that the decline in the LFPR of older men cannot be explained by demographic trends, changes to Social Security and private pension rules, health, or health insurance availability. We attribute the increase in the LFPR in recent years mainly to changes in the distribution of education among older men. Our results also suggest that increases in the Social Security delayed retirement credit, increased employment of the wives of older men, and the shift from Defined Benefit to Defined Contribution pension plans all may have contributed to the recent LFPR gains.