How Policy Changes Keep America's Silver Workforce on the Job

Wellesley College researcher Courtney Coile notes in a new National Bureau of Economic Research study that public policy may have a role to play in the increasing likelihood of older workers continuing their employment, reports the Royal Oak Daily Tribune . Coile says changes to the Social Security program have made it easier for older Americans to work without incurring financial losses. Social Security Act amendments passed in 1993 established an incentive for working later in life by boosting payouts for people who delayed retirement and by lifting the official retirement age. In 2000, the Senior Citizens' Freedom to Work Act revised the Social Security earnings test, making it unnecessary for those who retired late. The cumulative effect was to reduce the implicit tax on work between the ages of 65 and 69 by about 15 percentage points. Worth noting is that public policy's increasing permissiveness for late-in-life work coincided with employers' transition from defined-benefit pension plans to defined-contribution plans. All these factors should continue to encourage older Americans to maintain employment in greater numbers.