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COVID-19 Retirees Leave Hole in Workforce

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].”
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