You may have heard about America’s great “unretirement.”
Millions of older Americans retired early, before age 65, during the pandemic, but now, to most economists’ surprise, they’ve boomeranged back into the workforce faster than other age groups.
An estimated 1.5 million of those would-be retirees are back to work according to US Bureau of Labor Statistics data. The workforce participation rate for people aged 55 to 64 has returned to its pre-pandemic level. (People age 65 and older have not returned at the same rate.)
What happened?
There’s no single answer, says Owen Davis, a research associate at the Schwartz Center for Economic Policy Analysis and a PhD candidate in economics at the New School for Social Research. People choose to return to the workforce for a host of reasons. And when it comes to this age group, he told Quartz, the data can hide important nuances.
Certainly, older workers have responded to the sudden rebound in demand within the labor market—a rebound that came about because of government stimulus efforts, he continues. But in the chart below, the v-shaped labor force recovery for 55-to 64-year-olds obscures the possibility that, if the pandemic hadn’t happened, there would likely be even more older adults working today, says Davis.
Though no one can say for certain, “if pre-pandemic trends had continued, there would be more workers of all ages in the labor force, including older workers,” Davis asserts.
“It’s safe to say that the [overall] participation rate would have risen above its February 2020 peak,” he says.
That’s especially relevant for older adults because from 2015 to 2020, that group’s workforce participation rate started to grow for a number of reasons. Firstly, it was easier to find work in the strong economy of the late 2010s, says Davis, but also because people are living longer lives, have better healthcare, and are working in jobs that are less physical than in the past.
In other words, the pandemic may have been an even bigger setback to this age group than the current data suggests. There may be many older workers who want to return to work right now and are facing well-established obstacles, such as age discrimination, that make it much harder for an older employee to be rehired after leaving or losing a job, Davis suggests.
Going back to work after retirement? It’s complicated
The data also don’t indicate how many of the people who went back to work would have preferred to retire, but couldn’t—a sign that the system could be failing them, he adds. Given the heightened risks to older people of falling severely ill from covid, you might expect to see participation rates much lower than they are, he says.
And there are other inequities that don’t show up in the data, either, he adds. “Retired” folks might be pulled back into the workforce—because of the higher cost of living due to inflation, or because they are watching their 401k funds shrink—but the conditions under which people return might be very different depending on where they started.
In this recovery, there are stories of people—typically people who had held management or executive roles—being offered signing bonuses to come out of retirement, he points out, but that scenario would be less likely for someone who worked in a less prestigious position, earning less money.
In most cases, when an older person re-enters the work force after losing a job, they will likely earn a lower wage than what they were making before the pandemic. “Being very experienced, and then losing your job, means it’s much more likely that the job you eventually find is going to pay you less and just be less attractive,” Davis says, partly because of age discrimination, but also because of “the loss of experience that was really specific to a particular workplace, or occupation, or company.”