Understanding the Aging Workforce: Defining a Research Agenda (2022)
Chapter: Summary
Summary
The U.S. population aging is a fact that may have important economic repercussions, including slowing down long-term economic growth and raising the costs of social programs. At the same time, due to medical advancements and public health improvements, the Baby Boom cohort has experienced better health and increasing longevity, compared to earlier cohorts, as its members enter retirement ages. These improvements in health enable many older adults to continue working at older ages. Such higher labor market participation from this older workforce, were it to continue, could soften the potential negative impacts of population aging over the long term on economic growth, the funding of Social Security, and the funding of other social programs. However, these trends in population aging and healthier longevity have occurred amidst a complicating backdrop of growing social diversity and widening economic inequality in which many older adults face constraints on their working and retirement behaviors.
These constraints fall along existing lines defined by social and economic inequalities such as gender, race-ethnicity, immigration status, socioeconomic status, and geographic region. But these disparities do not suddenly emerge as adults approach retirement. Health, financial security, employment, and retirement at older ages are shaped not only by current characteristics but also by the structures of opportunity experienced throughout the life course. The impacts of discrimination and structural inequality experienced in early adulthood and midlife continue to affect the work and retirement opportunities available to older adults. The effects of these inequities accumulate over the life course, affecting health and determining the resources and opportunities available for retiring or reducing employment in later life. Thus, transitions between work and retirement reproduce and reinforce social and economic inequality at older ages, and their effects are further compounded by the additional, well-documented effects of age discrimination.
These forces together have shaped people’s preferences for working longer, their expectations about the future, and the constraints on their working at older ages. An aging workforce, extended healthy life expectancy, mounting inequality, new technologies, and heightened economic and job precarity mean work arrangements among older adults are in flux. Instead of viewing full-time retirement as a one-time event and an inevitable end of one’s work engagement, growing numbers of older adults sustain various forms of workforce participation, even though retired from their main or career jobs. These patterned shifts challenge the definitions of what it means to work and to retire in the United States as social, economic, technological, and demographic transformations reshape the possibilities and precarities that characterize the later life course among an increasingly diverse and heterogeneous older population.
STATEMENT OF TASK
The Arthur P. Sloan Foundation asked the National Academies of Sciences, Engineering, and Medicine (the National Academies) to produce a consensus study on the aging workforce and employment at older ages. The specific charge to the National Academies was as follows:
The National Academies of Sciences, Engineering, and Medicine will undertake a study that will review and assess what is known about the aging workforce in the United States, identify gaps in current knowledge and data infrastructure, and make recommendations for future research and data collection efforts. The study will focus on the individual-level human capital and demographic characteristics associated with decisions to continue working at older ages and on the social and structural factors, including workplace policies and conditions, that inhibit or enable employment among older workers.
The National Academies appointed the Committee on Understanding the Aging Workforce and Employment at Older Ages to carry out this task. Ten prominent scholars representing a broad array of disciplines—including economics, psychology, organizational psychology, labor relations, sociology, and social work—were included on the committee. The committee met six times and deliberated over an 18-month period to produce this report.
OVERARCHING FINDINGS AND CONCLUSIONS
The committee’s multidisciplinary framework conceptualizes work at older ages as being shaped by an individual’s preferences for work and expectations about the future, as well as the constraints on their ability to realize their preferred work relationships. These three dimensions—preferences, expectations, and constraints—are mutually shaped and reinforcing. When the literature on work at older ages is viewed through this conceptual lens, two overarching conclusions emerge.
CONCLUSION I: Older workers’ preferences for work and specific work arrangements, their expectations about available work opportunities and financial stability, and the constraints on their work opportunities and behaviors all reflect the impact of both age bias and social and economic inequalities that structure economic opportunity throughout the life course and lead to wide disparities in employment and retirement pathways at older ages.
CONCLUSION II: The experiences of vulnerable older populations, including women; racial and ethnic minorities; immigrants; those with less education, low income, or limited savings and wealth; those living in rural or economically disadvantaged areas; and those with multiple intersecting vulnerabilities remain understudied within the current literature. This limits our understanding of the ways in which inequality in retirement and work opportunities and outcomes contributes to broader social and economic inequality that affects the well-being of older adults.
Considering the diversity of experiences and outcomes within the older worker population, as well as the ways opportunities are shaped by inequality throughout the life course, can provide important research insights—even when research is not explicitly focused on social and economic inequality. Doing so will provide a deeper understanding of the benefits and disadvantages of extending work lives. That in turn can inform the development of policies to enable work at older ages in ways that account for the challenges vulnerable populations face and, thereby, improve their well-being.
DEFINING A RESEARCH AGENDA FOR OLDER WORKERS
The preceding overarching conclusions provide the framework for implementing future research and data collection agendas. The committee’s review of the extant literature identified three specific lacunae in existing scholarship, which cut across multiple levels of analysis and are the most promising areas for future research: the relationship
between employers and older employees; work and resource inequalities in later adulthood; and the interface between work, health, and caregiving. Each can be summarized as follows:
CONCLUSION 1: Retirement is too often viewed as an overly individualized process of workers stimulated or constrained by macro-level forces. However, other forces shape work and retirement pathways by constraining or increasing older workers’ agency in making decisions. These forces include workplace norms, policies, and practices, within the context of the employer-employee relationship.
CONCLUSION 2: Much of the research on older workers focuses on the experiences of socially and economically advantaged workers, because they are more likely to work longer. Historically disadvantaged subgroups are less likely to have control over when, where, and how much to work or the resources and opportunities to enact their preferences for work at older ages. Less is known about how preferences, expectations, and constraints reflect these differences, intersect with age biases, and translate into different employment patterns at older ages and how this contributes to social and economic inequality in later life.
CONCLUSION 3: Although the relationship between physical health and work at older ages has been well established, less is known about other aspects of the relationship between health and work at older ages, such as the role one’s own mental health; the health and caregiving needs of family members; and how accommodative practices can enable working longer. Moreover, little is known about how recent declines in health at midlife and younger ages, particularly among those with less education, will affect labor force participation and worker needs for accommodative practices in the future.
A further explication of the key research questions and data collection needs within each of these three areas is described in greater detail below. When considered as a whole, the findings within the report reveal a research agenda that, if enacted, would provide a more comprehensive understanding of the employment experiences of older workers and the constraints that shape their opportunities for work at older ages.
The Employer-Older Employee Relationship
It is critical to more consistently and comprehensively address research questions about the effects of workplace policies and practices. Employers are the crucial link between macro-level public policies and individual-level outcomes among workers. Employers are also the main social actors who translate public policies into organizational practices that set the stage for individual decision-making, including workforce participation and retirement. Workplace practices shape the incentives and opportunities for older workers to remain productive and engaged. Understanding the role of these practices in facilitating longer working lives is crucial during this period of population aging. Important areas for future research include the implementation of workplace policies; policies and practices that affect work and retirement; and the role of age discrimination.
Implementation of Workplace Policies and Practices
Within workplaces, both employer and employee interests shape the employer-employee relationship, but these interests may differ or align. When employees have a say in their work (employee voice), they can influence the types of practices employers implement. Employee voice can be part of independent collective representation that negotiates with employers or when individual employees express their concerns and opinions directly to employers. Greater employee voice at the workplace can be instrumental in expanding work options for older employees, such as through part-time work, remote work, or partial retirement. Moreover, greater employee voice can help reduce inequalities by fostering greater access to practices across ages and historically disadvantaged subgroups. Few researchers account for employer and employee interests and the institutional context in which workplace policies and practices are implemented even though these interests and contexts determine how they are implemented.
When employers introduce new workplace practices that benefit older workers, they can do so in either age-specific or age-neutral ways. Age-specific practices are tailored to older workers and can be useful in meeting their specific needs, but they run the risk of stigmatizing older workers as a “special group” and encouraging discrimination against them. Age-neutral practices are designed for all workers and therefore avoid age-based stigmatization; however, when the needs of older workers differ from those of younger workers, such practices risk losing the effectiveness found in practices specifically designed for older workers. The relative effectiveness of age-specific and age-neutral practices in improving outcomes for older workers has not been adequately examined and additional research is needed to assess the tradeoffs between the costs and benefits of each.
Workplace Policies and Practices That Affect Work and Retirement
Older adults are more likely than younger people to express preferences for specific work conditions, such as flexible work schedules or paid leave, and they report willingness to delay retirement or return to the labor force if such conditions were available. Workplace practices, such as flexible work schedules, the introduction of accommodative technologies and innovations, and worker training programs have been proposed as ways to improve the retention of older workers, but the effectiveness of these practices has not been empirically established.
Flexible work arrangements can involve flexible work hours, time off, or remote work; they can be voluntarily chosen by workers or involuntarily imposed by employers for business reasons. More research is needed to understand the types of flexible arrangements that affect the retention of older workers and the timing of retirement. Similarly, although technology that reduces the physical or cognitive demands of work can make jobs safer—such as by monitoring repetitive tasks, providing lift and positioning technology, or aiding workers’ strength—technological innovations can also eliminate the need for some jobs. More research assessing both the positive and negative impacts of technological change and innovation on the employment of older workers is needed. Very little is known about the implementation of enabling technologies in the workplace or whether there are age-based disparities in the impact of technological innovation on job elimination.
Workplace training programs could help mitigate the impact of technological change by improving workers’ skills; however, older workers are less likely to use these programs. It is unclear whether this is because older workers are less motivated to pursue these opportunities or because organizations are less likely to offer them to older workers. Moreover, more research is needed to determine whether older-worker–focused training is effective in retaining older workers.
The Role of Age Discrimination
Workplaces are also sites where age discrimination occurs. Workplace age discrimination can occur in many forms, some of which are subtle or complex, presenting significant measurement and methodological challenges. Current research suggests that older workers experience age discrimination in hiring, promotion, performance evaluation, and workplace opportunity and climate; however, the quality of evidence varies with the strongest evidence (presented from audit studies) demonstrating clear discrimination in hiring. High-quality studies are needed to address whether, when, and how discrimination occurs on the job, and these studies need to be conducted with the same rigor as audit studies.
Most on-the-job measures of discriminatory treatment rely on either self-reported attitudes or stereotypical beliefs about older workers or perceived discrimination reported by the target. However, more subtle forms of bias, as well as discrimination that is unseen by the target, are not captured by these measures. Although older workers report being the target of discriminatory behavior and employers and workers often subscribe to negative stereotypical beliefs about older workers, the causal chain of evidence on age discrimination is incomplete because it lacks evidence of coworkers’ and managers’ reported and observed discriminatory behavior toward older people. These behaviors require further elaboration through innovative studies that produce rigorous evidence.
Beyond interpersonal treatment, age discrimination can operate through organizational culture and practices. However, better conceptual and operational definitions of inclusive organizational policies are needed, as are multilevel models of their antecedents, indicators, and consequences. More research is needed to identify inclusive
organizational policies that mitigate against age-related biases entering into decisions at all stages and levels of analysis and to determine whether these policies actually create a more inclusive culture. For example, organizationally determined measures of employee performance and productivity can be biased in ways that negatively affect both formal and informal assessments of older workers’ contributions. Productivity is hard to measure, causally ambiguous, sensitive to the level of aggregation, and distinct by job type. The most common measures omit dimensions on which older workers outperform younger workers, possibly resulting in biased assessments of older-worker performance. More research is needed to evaluate how this exclusion affects researcher, supervisor, and peer estimates of worker productivity, workplace performance, and the value of retaining older workers.
Better measures of discrimination and methodologies that can causally establish these relationships are crucial for understanding the impact of age discrimination on the retention of older workers, as well as the impact of discrimination on health. Older workers who report being the targets of discriminatory behaviors and practices are less likely to be satisfied with and to remain in their jobs, and they are also more likely to report that they are in poorer health. However, although reports of discrimination have been linked to job dissatisfaction and negative health outcomes, the causal link has yet to be established. Evidence of causality awaits better designs, because other factors (e.g., depression) could explain both. Research that includes such covariates (e.g., optimism, personality, support, intersectional identities) will likely clarify and isolate the relationships among perceived workplace discrimination, health, and labor force participation.
New Data Collection Strategies
Addressing the research gaps with respect to the workplace practices outlined above requires gathering data about the organizational context and the perspectives of managers and older workers within the employment relationship. The need to situate employee responses to and outcomes of any policy and/or practice within the organizational context underscores the need for longitudinal data that is matched between employers and employees. Most of the existing panel surveys sponsored by the U.S. government focus on sampling individuals or households; such surveys might inquire about participants’ work, but contain little about the context of their work or even their industry sector. Representative population-based surveys of U.S. workplaces are designed to ask only limited organizational questions and cannot be linked to data on workers’ understanding of, access to, and use of workplace policies and programs. This has meant that research on workplace policies and practices typically must rely on access granted by individual companies or establishments. This access is difficult to negotiate and sustain over time, which results in findings that are unrepresentative and may not be generalizable beyond the organizations studied.
A nationally representative longitudinal panel focused on sampling U.S. workplaces, which also contains multilevel matched data between employers and workers, does not currently exist, but such a panel would be invaluable for advancing research on the role of employers and workplaces on older workers’ employment experiences. The costs of developing a new panel survey could be substantial; however, as an alternative, adding questions about age-related and age-neutral practices to existing surveys would be a step in the right direction. Questions about age-related practices such as partial retirement, mixed age/experience teams, training targeting older workers, and workforce age assessments, as well as questions about age-neutral practices such as flexible schedules, the use of ergonomic technology, employee participation, and skills training would be most welcome.
Work and Resource Inequalities in Later Adulthood
Older adults face inequities in employment opportunities and financial resources and stability that constrain their ability to realize their preferred employment relationships. Though they are often measured at a point in time, these inequities build and accumulate throughout the life span. Adults who face limited work opportunities during their prime working years will face a considerable disadvantage in work opportunities and accumulated savings when they reach conventional retirement ages. Though work at older ages can substantially improve the financial security of older adults, particularly those with limited savings and wealth, work opportunities are not always available.
Opportunities to remain in the labor force often reflect underlying economic inequality in opportunity by gender, race-ethnicity, socioeconomic status, and geography. Since those who work longer are disproportionately
economically and socially advantaged, extant research on older workers does not always adequately measure or represent the experiences of less advantaged older workers or how those experiences are shaped throughout the life course.
A Life Course Perspective on Inequality
The processes underlying work outcomes at older ages can be understood as the result of a lifetime of experiences that shape opportunity in later life. The processes that structure unequal work and retirement pathways at older ages do not begin at age 50. Research that adopts a life course conceptual lens could promote a better understanding of disparities in later adulthood by underscoring the cumulative impact of the multilayered embeddedness of lives in ongoing biographies and in historical and institutional environments. A fundamental life course theme is that transitions, such as later adult exits from or reentries into paid work, occur within trajectories of experience that give them shape and meaning. By shifting the research focus to how early experiences and contexts influence older workers’ current preferences, expectations, and constraints on opportunities for work, a life course perspective could identify how historical structural inequalities continue to affect inequality in work outcomes at older ages.
Individuals are embedded within a context of mutual interdependence within families and social networks, and in temporal and geographic terms they are also embedded within historical and social contexts. Couples often make decisions around retirement timing together, or in light of each partner’s preferences. And family situational constraints, such as the need to care for a grandchild or an aging family member, may alter work and retirement preferences and expectations. Contextual embeddedness implies that life transition and developmental trajectories occur under specific circumstances, including historical, policy, organizational, and social contexts. Individuals are embedded within multiple contexts (e.g., households/families, neighborhoods, states, and nations), which they both shape and are shaped by. A better understanding of these interdependent relationships would provide a more complete understanding of the contexts and constraints under which work transitions occur. Failure to consider these contexts may lead scientists to put too much emphasis on the effects of individual characteristics and miss the ways in which these effects are constrained by the contexts in which they are embedded.
Inequality in Work Opportunities
Labor market factors, such as globalization and automation, target specific occupations and locations, affecting work opportunities within some geographic areas or for some classes of workers. The affected workers are often defined by skill level or type, but also by age, gender, and race-ethnicity due to labor market segregation. These changes often reinforce existing economic inequalities, because displaced older workers are less likely to be reemployed. Though research has documented education-based differentials in the effects of automation, globalization, and geographic disparities on employment opportunities, less is known about their specific impact on older workers or about public policies that could mitigate their adverse impact. Though social policies have been introduced to improve economic opportunities of displaced workers (e.g., local or regional economic revitalization or worker retraining or reskilling), little is known about the effectiveness of these policies in engaging older workers and improving the work opportunities available to them nor their comparative impact relative to integrative policies implemented in other countries.
Wide education-based disparities in employment at older ages has meant that much of the research on older workers has focused on economically advantaged workers. However, vulnerable populations, including less-educated workers, racial-ethnic and other minority workers, women, the self-employed, “gig” and informal workers, workers with poor health or disabilities, noncitizen immigrants, and those living in rural areas, all face distinct challenges in continuing to work in later adulthood. These workers are more likely to engage in informal and unstable work, and they are also more likely to experience multiple transitions into and out of the labor force. Current measures of work provide only a limited understanding of the complex employment experiences of low-income older adults, including simultaneous participation in formal- and informal-sector jobs, involuntary job separations leading to early labor force withdrawal, and barriers to work. They do not adequately capture low-income older adults’ sources of income, multiple occupations, sporadic jobs, access to healthcare and other labor benefits, and eligibility for and take-up rates of supplemental income support programs.
Social networks and social capital may play an especially important role in identifying employment opportunities for older adults who have more tenuous and less formal contact with the labor market. These social connections inform and enable varied paths between work and retirement. Although social networks play an important role in labor force participation and employment opportunities among younger workers, less is known about how these social mechanisms function with advancing age, as social networks retract, especially when individuals are pressed to retire or if they live in communities with few employment opportunities. National-, state-, and local-level organizations are institutions that can help older adults build social capital. Formal volunteering could expand and strengthen social ties, while also bolstering various dimensions of health. These social and health resources generated and maintained through volunteering might encourage and aid older adult volunteers in transitioning to employment; however, the pathways between paid work, retirement, civic engagement, and returning to the labor market are not fully understood.
Inequality in Financial Security
Financial security is one of the most important considerations workers face in forming preferences and expectations about retiring or continuing to work. Inadequate retirement savings constrains older individuals’ retirement decisions. Although there remains considerable debate regarding whether older adults have adequate savings for retirement, there is a consensus that workers today face growing challenges in saving adequately for retirement. Financial security in old age is more tenuous for members of historically disadvantaged groups due to their lower wealth. It is critical to conduct research on lifetime earnings, saving, and wealth accumulation of historically disadvantaged groups, including lower-skilled vulnerable workers with discontinuous work histories and multiple or sporadic jobs, to better understand their pathways to retirement and income security in old age, including the effectiveness of public programs. Social programs play an important role in both income security and employment decisions at older ages, particularly for vulnerable populations, but more research is needed to understand how these programs affect labor force behavior at older ages.
New Data Collection Strategies
Addressing these key issues will require improvements to the current data infrastructure and data analyses. To date, most existing research focuses on individuals’ experiences at particular time points, absent the rich insights that multilayered process-based and contextual data could provide. Understanding the ways earlier life experiences shape the resources and options available to older workers will require expanding data collection strategies to incorporate life-history, relational, and contextual data. The ability to document the experiences and challenges of vulnerable populations has been constrained by both the lack of measures that capture the full range of diversity of their work experiences, such as participation in the informal labor sector or in precarious, sporadic, or “gig” work, and the lack of sufficient samples of respondents from these populations in most data sets. Innovative data collection and research strategies could enable a better understanding of the needs of these populations and, therefore, a strengthened ability to address them.
Such an agenda could document how existing institutional and organizational arrangements serve to structure inequalities in later-life work—and nonwork—outcomes. Future research could prioritize the necessary data and analytic methods to document both disparate pathways and their antecedents, keying in on the distinctive work and retirement preferences and experiences of subgroups of older individuals, as well as heterogeneity and disparities within as well as across subgroups. Such scholarship is necessary to understand inequalities in the possibilities for working longer and the need to recast policies and practices at the national, state, and employer levels in ways that facilitate longer working lives.
The Work-Health-Caregiving Interface
While many studies document an association between poor health and retirement, determining the causal effects of health on retirement is challenging due to several factors: the difficulty of determining the appropriate measure of health; the interrelationship between health and other factors associated with retirement; and the
subsequent effect of retirement on health. Despite these challenges, a causal relationship between poorer health and retirement has been well established across a wide number of studies. However, the mostly commonly used measures of health in this research are self-reported health status and the presence of a work-limiting disability. These are useful summary measures that are frequently available in survey data, but they are largely focused on physical health. Mental and cognitive health may also be important for continued employment at older ages, but little is known about this relationship.
Though much of the current research on health has focused on the effects of own health on employment, the health and caregiving needs of family members also affect work and retirement decisions. Informal unpaid caregiving also follows identifiable, patterned pathways; that is, the intensity and duration of providing care to family members often conflicts with employment and often leads to part-time work and forced retirement. The interrelationship between caregiving and labor force participation is dynamic and complex as they jointly play out in later life. Differences in the type and intensity of caregiving needs of the recipient as well as likely interaction effects between the health, social, and economic status of the informal caregiver and that of the care receiver add to the complexity of this relationship. There are likely interactions between working conditions, employment policies, and practices shaping resources for caregiving. Fluctuating caregiving demands affect the timing of retirement and other exits from the labor force. These individual, dyadic, and employment dynamics are further shaped by state and federal policies, such as paid family and medical leave. Research has not yet modeled these conjoint later-life course dynamics nor has it shown how they differ across diverse groups of caregivers and care receivers.
These issues take on greater urgency because in recent years, a growing number of adults at midlife and at younger ages have reported poorer health and more chronic health conditions, while mortality has increased. These trends are more pronounced among less educated individuals, resulting in growing disparities in health by educational attainment that have implications for future trends in the employment of older workers. The presence of chronic health conditions may affect labor force participation and the productivity of older workers in current and future cohorts. Poor health can constrain labor supply, forcing some workers into early retirement. Workers in poor health may be less productive, may require disability accommodations, or may generate higher health care costs for employers—or employers may perceive this to be the case even if it is not. All of these factors could result in lower demand for older workers. Understanding the reasons underlying this erosion in the health of younger cohorts trend may provide insights into future trends in work at older ages.
CONCLUSION
Work and retirement decisions are the result of the interrelated effects of individual preferences for work, expectations about the future, and constraints on work behaviors within the larger contexts of social and economic change. In order to fully understand the ways in which individual characteristics affect the experience of work at older ages, their effects must be considered within these broader contexts to understand how they influence individual preferences, expectations, and constraints. But these individual preferences, expectations, and constraints operate within complex systems of social and economic inequality that develop throughout the life course, and thus they may be specific to the historical circumstances in which individuals enter their adulthood and, later, their retirement ages.
We know too little about the well-being of older workers and of those who are not working but may wish to do so under certain conditions, as well as of those who are working despite a preference to retire. For example, too little is known about the micro-level impacts on older adults’ work and retirement of large-scale social changes—in technology, the economy, the labor market, and society at large.
Much of what we know about the later work course comes from studies of earlier cohorts, people who confronted very different demographic, technological, social, and economic forces, as well as from different private-sector and public-policy regimes. It would be beneficial for future research to explore contemporary—and changing—experiences of work and retirement and the conditions that are shaping health and well-being.
