Women Working Longer

May 21 and 22, 2016
Claudia Goldin and Lawrence Katz of Harvard University, Organizers

Women's Labor Force Transitions over the Lifecycle

Claudia Goldin and Lawrence Katz

Women Working Longer: Facts and Some Explanations

Nicole Maestas, Harvard University and NBER

The Return to Work and Women's Employment Decisions

It is well documented that individuals in couples tend to retire around the same time. But because women tend to marry older men, this means many married women retire at younger ages than their husbands. This fact is somewhat at odds with lifecycle theory that suggests women might otherwise retire at later ages than men because they have longer life expectancies, and often have had shorter careers on account of childrearing. As a result, the opportunity cost of retirement—in terms of foregone potential earnings and accruals to Social Security benefits—may be larger for married women than for their husbands. Using the Health and Retirement Study (HRS), Maestas finds evidence that the returns to additional work beyond mid-life are substantial for married women, and much smaller for married men. The potential gain in Social Security benefits alone is enough to place married women on equal footing with married men in terms of Social Security wealth at age 70.

Family Aspects of Working Longer: Caregiving

Sean Fahle, SUNY Buffalo, and Kathleen McGarry, University of California at Los Angeles and NBER

Employment Transitions and Elder Caregiving

Family care is a potentially critical factor in women's labor supply decisions at older ages. In this paper, using the Health and Retirement Study (HRS), Fahle and McGarry document the extent and intensity of family caregiving among a representative sample of women ages 50 or older. The authors define family caregiving broadly to include three types of care: care given to elderly parents and in-laws, care for spouses and partners, and care provided to grandchildren. The results indicate that parent-in-law and grandchild care are widespread during a woman's prime working years. By age 65, 25 percent of women in the HRS had cared for a parent or in-law and nearly 60 percent had cared for a grandchild while just under 10 percent had provided care to a spouse. Focusing on the most prevalent types of care—to parents-in-laws and grandchildren—the authors estimate the effect of caregiving on labor market behavior and find that caregiving is associated with small but significant decreases in labor force participation and earnings. Furthermore, few women return to work after a spell of caregiving. These results indicate that the provision of care has the potential to affect economic well-being both immediately and in the longer-term

Financial Aspects of Working Longer: Resources, Pensions and Social Security

Annamaria Lusardi, George Washington University and NBER, and Olivia Mitchell, University of Pennsylvania and NBER

Older Women's Labor Market Attachment, Retirement Planning, and Household Debt

The goal of this paper is to ascertain whether older women's current and anticipated future labor force patterns have changed over time, and if so, to evaluate the factors associated with longer work lives and plans to continue work at older ages. Using data from both the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS), Lusardi and Mitchell show that older women's current and intended future labor force attachment patterns are changing over time. Specifically, compared to their HRS baseline surveyed in 1992, more recent cohorts of women in their 50s and 60s are more likely to be working. When the researchers explore the reasons for delayed retirement among older women, factors include education, more marital disruption, and fewer children than prior cohorts. But household finances also play a key role, in that older women today have more debt than previously and are more financially fragile than in the past. Data from the NFCS show that factors associated with retirement planning include having more education and greater financial literacy. Those who report excessive amounts of debt and are financially fragile are the least financial literate, had more dependent children, and experienced income shocks. Thus shocks do play a role in older women's debt status, but it is not enough to have resources: people also need the capacity to manage those resources, if they are to stay out of debt as they head into retirement.

Alexander Gelber, University of California at Berkeley and NBER; Adam Isen, U.S. Treasury; and Jae Song, Social Security Administration

The Role of Social Security Benefits in the Increase of Older Women's Labor Force Participation: Evidence from the Notch Cohorts

To understand trends in elderly women's work decisions, a key question is the extent to which changes in Social Security have played a role. Gelber, Isen, and Song estimate the effect of Social Security benefits on women's employment rate by examining the Social Security "Notch," which cut women's average Old Age and Survivors Insurance (OASI) benefits substantially in the 1917 birth cohort relative to the 1916 cohort. This led to sharply different benefits for similar women born one day apart. Using Social Security Administration microdata on earnings in the full U.S. population by day of birth, the researchers find evidence for substantial effects of this policy change on elderly women's employment rate. The authors find that the slowdown in the growth of Social Security benefits in the mid-1980s can account for around one-third of the increase in the growth of older women's employment that occurred during this period.

Maria Fitzpatrick, Cornell University and NBER

Teaching, Teachers Pensions and Retirement across Recent Cohorts of College Graduate Women

Labor force participation rates of college-educated women ages 60 to 64 increased by 20 percent (10 percentage points) between 2000 and 2010. One potential explanation for this change stems from the fact that fewer college educated women are going into teaching. This occupational shift could affect the length of women's careers because teaching is a profession where workers are covered by DB pensions and, generally, DB pensions allow workers to retire earlier than Social Security. Maria Fitzpatrick provides evidence supporting this hypothesis and shows that older college-educated women who worked as teachers do not experience increases in labor force participation as large as their counterparts who never taught.

Family Aspects of Working Longer: Joint Retirement and Marital Stability

Janice Compton, University of Manitoba, and Robert Pollak, Washington University, St. Louis and NBER

What about the Surviving Spouse: Lifecycle Saving, Labor Supply and Claiming Social Security Benefit

Claudia Olivetti, Boston College and NBER, and Dana Rotz, Mathematica Policy Research

Changes in Marriage and Divorce as Drivers of Employment and Retirement of Older Women

This chapter contributes to understanding of women's later-life labor force participation (and the impacts of unilateral divorce) by using the widespread changes in divorce laws occurring in the late 1960s, 1970s, and 1980s as a quasi-experiment to assess the importance of marital history on employment outcomes at age 50+. Using data from the 1986 to 2008 waves of the Survey of Income and Program Participation (SIPP), Olivetti and Rotz document the relationships between current marital status, past marital history, and current employment outcomes for women born 1911-1958. Authors then exploit changes in laws governing divorce across states and over time as a, plausibly exogenous, source of variation in divorce risk across the lifecycle.
Olivetti and Rotz find that the spread of unilateral divorce was associated with cross-cohort differences in the probability of divorce over the lifecycle. Women who were exposed to unilateral divorce at later ages tended to get divorced later in life (conditional on ever getting divorced). They also exhibit different patterns of labor force participation and retirement at older ages. For ever-divorced women, an increase in divorce risk at a later age significantly increases the probability of full-time employment at age 60 and older and it's associated with a lower probability of acquiring additional education post-marriage, and a lower level of retirement wealth. Taken together, these results suggest that women who divorce at a later age might have to work more post-divorce and later in life to make up for lower levels of financial well-being after divorce. For never-divorced women, a later exposure to divorce risk is associated with a substantial decline in full-time employment after age 60. This finding is consistent with the literature, which suggests that married women work more as a precaution against divorce when divorce risk increases.

Joshua Mitchell and Adam Bee, U.S. Census Bureau

Causes and Consequences of Women Working Longer: The Role of Retirement Resources

Women Working Longer? The Exceptions

Joanna Lahey, Texas A&M University and NBER

Why aren't black women working longer?

Black high school graduate women in current cohorts age 50-75 have lower employment than similar white women, despite having had higher employment when they were middle-aged and younger. Additionally, the gap between black and white women in white women's favor has increased with each successive cohort of older women. While it is not surprising that white women's employment should catch up to that of black women given trends in increasing female labor force participation, it is surprising that it should surpass that of black women. In this chapter, Lahey discusses factors that pull women into and out of employment and how they change over time for older black high school graduate women compared to similar white women.