U.S. baby boomers have retired in droves since the start of the pandemic, exacerbating workforce shortages in some sectors, according to The Wall Street Journal (subscription).
Fewer retirees: The proportion of retirees among Americans older than 16 came to a seasonally adjusted 19.6% in Q3, compared to 18.5% in Q4 of 2019, according to the Federal Reserve Bank of Philadelphia.
- While many younger people who left the workforce temporarily due to COVID-19 have resumed working, the same cannot be said of older people, according to data from the Labor Department.
Why: Concerns about contracting the coronavirus, as well as the stress of working during the pandemic, have led to earlier retirements.
- However, “[e]ven before the pandemic, overall labor-force participation in the U.S. was falling as the nation’s population aged. The rate hovered at about 63% before the pandemic, down from its peak of roughly 67% in the 2000s.”
Departures along income lines: Older workers with less education and lower incomes appear to have retired in larger numbers than their more educated, higher-compensated peers, according to research.
- “About 38% of workers aged 62 and older and in the lowest third of weekly earnings no longer held jobs in the fourth quarter of 2020, up from 28% in the second quarter of 2019, according to the analysis from Geoffrey Sanzenbacher, a research fellow at [Boston College’s Center for Retirement Research].”