Raise the Retirement Age? The Reality of Older Workers and Employers' Demands

Raising the eligibility age for Social Security and Medicare is based on the assumption that elderly Americans can and should work more. In a new SCEPA Policy Note, "Older Workers and Employers' Demands" we present new evidence that rejects the assumption that elderly Americans are physically and mentally able to work for pay later into life and that, by extension, employers will find older people to be desirable employees. We find that older workers' physical and mental job requirements have increased between 1992 and 2008. Our findings align with Neumark and Song's (2012) conclusions that older workers are facing more age discrimination. Together these findings suggest that raising the retirement age – essentially is a cut in benefits – would hurt most older American workers.

This Policy Note describes older workers' self-reported job descriptions in 1992, 2002 and 2008. We access these data from the University of Michigan's Health and Retirement Survey (HRS), which conducts panel surveys biennially with over 5,000 respondents over the age of 50. We find that:

a) the downward trend in the physicality of job demands, observed in 1990s, is trending back up, and;

b) the downward trend in the physical demands of jobs held by the elderly was never apparent for the oldest working cohort, ages 62 to 65, who are eligible for early Social Security retirement.

These findings suggest different policy implications than what Johnson asserts. In particular, attempting to force older Americans to work longer by increasing Social Security and Medicare eligibility ages will have deleterious physical and/or mental impacts on many elderly workers, particular those with more demanding, often lower paying, jobs.

The New York Times ran a letter to the editor by SCEPA Research Assistant Anthony Bonen echoing the report's findings from the perspective of a millennial.

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