RAND Corporation Predicts More Encore Workers Needed

The number of older Americans who are continuing to work has increased dramatically, and it's likely to continue and even accelerate over the next two decades, according to a new RAND Corporation study. This trend could help ease the financial challenges facing Social Security and Medicare.

That news dovetails nicely with recent research from MetLife Foundation and Civic Ventures that found there will be more jobs than people to fill them by 2018.

After more than a century of decline, the number of older American men and women in the work force began to rise slightly after 1990, when about 17 percent of Americans ages 65 to 75 were employed. The RAND researchers say that percentage is expected to rise to 25 percent in 2010, with a jump in employment in the 75-plus age range as well.

The RAND report challenges government projections that the number of older Americans in the work force is likely to plateau over the next decade. While the U.S. Bureau of Labor Statistics predicts the number of employed men ages 65 to 74 will begin to flatten this year, and by 2020 for men age 75 and older, the RAND researchers believe the surge in employment among older Americans will continue until at least 2030.

Why? They note that American workers are more educated, have more fulfilling jobs, face fewer physical demands in the workplace and are paid more for their efforts.

That trend could be supercharged by additional incentives, they say, such as:

  • Changes to Social Security that delay full benefits from age 65 to age 67 (which will not take full effect until 2022)
  • The increasing number of women in the work force who qualify for Social Security benefits, motivating them to work longer in order to qualify for higher benefits
  • The need to accumulate wealth longer because Americans are living longer

The RAND report calls for policies that encourage Americans to delay retirement, such as eliminating clauses in some pension plans that penalize recipients who continue working.

Funded by the National Institute on Aging, the report was conducted through RAND's Labor and Population program.