The labor-force participation rate is increasing for older Americans (those age

55 and older) as older workers are faced with higher health costs and

economic losses, according to a study published today by the nonpartisan

Employee Benefit Research Institute (EBRI).

For those ages 55--64 (the "near elderly"), the increase is being driven

almost exclusively by the increase of women in the work force; the male

participation rate is flat to declining. However, among those age 65 and older

(the elderly), labor-force participation is increasing for both male and

females, says the study.

As the study suggests, workers increasingly are facing more responsibility in

paying for their retirement expenses: Private-sector workers who have access to

an employment-based retirement plan most commonly have a defined contribution

plan (typically a 401(k) plan, financed at least partially with workers' own

contributions), and retiree health insurance is becoming increasingly scarce.

Even for those who do have retiree health insurance, caps on what the employer

will pay annually for the coverage are being reached and/or surpassed.

Consequently, the study says, workers today have greater incentives to stay

in the work force, such as the ability (and in some cases the need) to continue

to accumulate assets in defined contribution plans and to have access to

employment-based health insurance coverage, instead of having to tap into their

savings to pay for their expenses.

The study, based on U.S. Census Bureau data, includes these additional

points:

• The percentage of civilian noninstitutionalized Americans age 55 or older

  who were in the labor force declined from 34.6 percent 1975 to 29.4 percent in

  1993. However, since 1993, the labor-force participation rate has steadily

  increased, reaching 39.4 percent in 2008--the highest level over the 1975--2008

  period.

• Education is a strong factor in an individual's participation in the labor

  force at older ages: Individuals with higher levels of education are

  significantly more likely to be in the labor force than those with the lower

  levels of education.

• The upward trend among the working near elderly and elderly is not

  surprising and is likely to continue because of workers' need for access to

  employment-based health insurance and for more earning years to accumulate

  assets in defined contribution (401(k)-type) plans--especially after the 2008

  downturn in the stock market and economy.

• While some older Americans have a greater need to work to help make their

  retirement assets last longer or to continue to build up assets, monetary

  incentives are not the only motivating factor. There also is an increased desire

  among Americans to work longer, particularly among those with more education,

  for whom more meaningful jobs may be available that can be done well into older

  ages.

About EBRI

EBRI is a private, nonprofit research institute based in Washington, DC, that

focuses on health, savings, retirement, and economic security issues. EBRI does

not lobby and does not take policy positions. More information on

EBRI and this study is at href="http://www.ebri.org">http://www.ebri.org.