Employment at Older Ages and the Changing Nature of Work

The AARP Public Policy Institute, formed in 1985, is part of the Policy and Strategy Group at AARP. One of the missions of the Institute is to foster research and analysis on public policy issues of importance to mid-life and older Americans. This publication represents part of that effort. The views expressed herein are for information, debate, and discussion. The opinions and conclusions are the responsibility of the authors and do not necessarily represent official policies of AARP or the Urban Institute. © 2007, AARP. Reprinting with permission only. AARP, 601 E Street, NW, Washington, DC 20049 http://www.aarp.org/ppi #2007-20 November 2007 Employment at Older Ages and the Changing Nature of Work by Richard W. Johnson, Gordon B.T. Mermin, and Matthew Resseger The Urban Institute i FOREWORD Older men and women today are better educated and generally believed to be healthier than their counterparts of a generation or more ago. Fewer jobs are physically demanding. As a result, longer worklives should be more feasible and attractive, especially if part-time and phased retirement programs, job sharing, telecommuting, and other flexible arrangements become more widely available. Interest in fostering longer worklives is on the rise, as policymakers, economists, and advocates for older Americans, among others, worry about the solvency of the Social Security system and the financial preparedness of many older persons for retirement. If labor shortages materialize in the face of boomer retirements, employers are likely to attempt to encourage more older workers to remain on the job or return to the workforce after retirement. Indeed, employers in industries such as health care that already have trouble meeting staffing needs have begun to target older workers in their recruitment efforts. But although workers may not be doing the heavy lifting that they did a generation or two ago, other aspects of work today may be taking their toll and making continued employment later in life problematic. These include possible increases in work intensity (e.g., pace of work, work hours, tight deadlines), job strain, and job insecurity resulting from globalization, corporate restructuring, outsourcing, and offshoring. Rapid technological change means more frequent training and retraining, which can make workers more employable on the one hand or running faster and faster just to stay in place on the other. The strain of commuting and coping with competing job and family responsibilities may compound work-related stress. In Employment at Older Ages and the Changing Nature of Work, Richard Johnson, Gordon Mermin, and Matthew Resseger of the Urban Institute examine many of the job demands workers face today, how demands have changed over time, and what they might look like in the future. Linking information on occupational characteristics from the Occupational Information Network (O*NET) to the March 1971 and March 2006 Current Population Surveys, the investigators document a sharp decline in the physical demands of jobs over the past 35 years. Not only are jobs less physically demanding, they are less likely to entail difficult working conditions. However, jobs have become more cognitively challenging and more stressful. Looking ahead, Johnson, Mermin, and Resseger conclude that the prevalence of job demands will not change much in coming decades if the occupational growth trends projected by the Bureau of Labor Statistics continue through 2041 and if the job demands of particular occupations remain constant. The future thus “bodes well for the employability of older adults,” the investigators conclude. Nor do they feel that the increase in cognitively demanding work will prevent many workers from extending their worklives. Sara E. Rix, Ph.D. AARP Public Policy Institute iiiCONTENTS EXECUTIVE SUMMARY ............................................................................................................ v Methods ...................................................................................................................................... v Prevalence of Job Demands in 2006.......................................................................................... vi Trends in Job Demands............................................................................................................. vii Implications .............................................................................................................................. vii Introduction..................................................................................................................................... 1 Background ..................................................................................................................................... 2 Retirement Decisions .................................................................................................................. 2 Trends in Factors A