Grants

The Brookings Institution

To develop estimates of how the decision by American workers to retire later impacts public budgets and the economy

  • Amount $576,793
  • City Washington, DC
  • Investigator Gary Burtless
  • Year 2010
  • Program Research
  • Sub-program Working Longer

By the mid-1980s, a century-old trend toward earlier labor force withdrawal by older American men came to a halt and subsequently reversed itself. At the same time, a shorter trend of flat labor force participation rates for older women stopped and their labor force participation rates began increasing. As a result, on average, older American men and women are now working longer and retiring later. Funds from this grant support a project by The Brookings Institution to estimate the impact of delayed retirement on overall economic output, on government income and payroll tax revenues, and on public spending, specifically on government programs such as Medicare, Medicaid, and Social Security. The project consists of several integrated subprojects. The first deconstructs the nature of the later retirement trend, asking which types of workers, in terms of gender, education, skill levels, and income, are retiring later and how they delay labor force departure. The second subproject investigates the nature of the physical and mental well-being of retirees over time. The third and fourth subprojects, which are to be informed by these labor force data, involve macro- and micro-simulation modeling of the impact of a rising retirement age for the economy and for public finances. At the completion of the subprojects, Brookings will organize a public forum in Washington, D.C. at which the research findings will be presented and discussed before an invited audience of policymakers, academics, and governmental and nongovernmental agencies concerned with aging and budget policy.

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