Management & Labor

Where Are More Older Workers Putting Off Retirement?

Americans are still working longer than they used to. View data showing states where more people tend to remain employed later in their careers.
by | October 23, 2013
 

Many Nebraska workers aren’t all that eager to call it quits and retire young. Nearly half of the state’s residents 55 years and older remain employed, more than any state in the country.

Over the past two decades, Americans continue to work longer, driven by numerous social and economic factors. The extent to which they're working later into their careers varies across regions, with some typically retiring several years sooner than those in Nebraska and other states.

Baby boomers in their 50s and 60s nearing retirement account for the bulk of the nation’s oldest workers. As this vast segment of workers prepares to head for the exits, states home to large numbers of employed boomers can expect to see a generational shift in their workforce.

To examine the aging workforce, Governing analyzed 2012 employment data for workers 55 years and older and 65 years and older in each state. In general, employees tend to work the longest in states boasting stronger economies that are more tied to the agriculture sector.

The following 10 states registered the highest employment-to-population ratios for workers age 55 and older:

  1. Nebraska: 49.0%
  2. North Dakota: 48.9%
  3. Vermont: 48.1%
  4. Alaska: 47.2%
  5. South Dakota: 46.1%
  6. Wyoming: 45.4%
  7. New Hampshire: 45.3%
  8. Kansas: 43.8%
  9. Iowa: 43.0%
  10. Maryland: 43.0%

These ratios are notably higher than a few states near the bottom of the list. In Arkansas, only 30 percent of individuals in this age group are employed – lower than any other state. Other states with low employment-to-population ratios for those age 55 and older include West Virginia (32 percent), Michigan (32 percent), South Carolina (33 percent) and Kentucky (33 percent). (See state-by-state data below)

Similar patterns emerge when reviewing only the segment of the workforce age 65 and older.

Nearly 27 percent of Nebraskans in this top age bracket were employed last year, also higher than any other state. About a quarter of them also work in neighboring Wyoming and South Dakota. By comparison, less than 15 percent of the 65-and-older population was employed in nine other states last year, mostly in the South.

So what’s to explain the regional differences?

One obvious answer is the industry concentration in each state. The Labor Department estimated a median age of 47.5 years for those working in the agriculture, forestry, fishing and hunting industry in 2012. Transportation and utilities (46.3 years) and public administration (45.3 years) also recorded higher than average median ages of the industry classifications surveyed.

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But there are other factors, too, that explain Nebraskans’ tendency to work longer, said Catherine Lang, the state’s labor commissioner. Along with the state’s large farming industry, a strong work ethic is ingrained in the culture as it is in other parts of the Midwest, she said.

“Many of our citizens continue to work as long as they can, regardless if they’ve reached a particular age,” she said.

While the Great Recession did not hinder the state’s economy to the extent that it did elsewhere, Nebraskans typically remained attached to their jobs rather than retiring.

Lang also suspects that it’s more common for older Americans to work in smaller towns and rural areas. “In our rural areas, we have an aging population,” she said. “There, remaining in the workforce becomes part of the rural culture.”

The number of weeks most age groups work annually has gradually declined or remained relatively flat since the 1980s. Meanwhile, rates for older Americans have steadily climbed over the past few decades.

Researchers Sudipto Banerjee and David Blau attempted to identify reasons explaining the diverging trends in study published earlier this year. One of their explanations was educational attainment (which correlates strongly with employment). Those now in their 50s and 60s have achieved higher levels of education than earlier generations. Social Security reforms, particularly the increase in the full retirement age, also played a role, according to the report.

Another study published by two University of California-Irvine researchers found that stronger state age discrimination laws boosted hiring and employment for older workers. However, these laws did not extend the work lives of employees performing physically-demanding jobs.

Of course, workers also weigh income, family and other concerns as they’re considering when to file their retirement paperwork.

By and large, older Americans willing and able can continue working – at least more so than those early in their careers.

The unemployment rate (non-seasonally adjusted) for those between age 55 and 64 was 5.2 percent last month. By comparison, the age 25-to-34 group recorded an unemployment rate of 7.2 percent, while the rate for 16-to-24 year-olds was 14.8 percent.

States where older workers account for the largest share of the total workforce tend to mirror broader population demographics. Workers age 55 and older made up the largest share of the total workforce in the following states last year:

  1. Montana: 27.6%
  2. Maine: 26.5%
  3. Vermont: 26.1%
  4. South Dakota: 25.2%
  5. West Virginia: 24.9%
  6. Hawaii: 24.7%
  7. New Hampshire: 24.4%
  8. Wyoming: 23.7%
  9. Kansas: 23.6%
  10. Florida: 23.5%

State Data

 
The following employment figures refer to the most recent 2012 annual averages. Select a state to view detailed figures:

 

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