Women Working Longer Pre-Conference

September 19
Claudia Goldin of Harvard University, Organizer

Labor Force Transitions of Women over the Lifecycle, I

Claudia Goldin and Lawrence Katz, Harvard University and NBER

Women Working Longer: Facts and Some Explanations

Women are working longer. During the past 25 years labor force participation rates among women 60 to 64 years old increased by 17 percentage points, on a base of 34 percent, in disproportionately full-time, year-round positions. In this exploratory study Goldin and Katz seek reasons for the increase, which began around the late 1980s. They use the Health and Retirement Study and linked Social Security earnings records to analyze the participation of women 59 to 63 years old across cohorts born from 1931 to 1951. Women are working longer mainly because of rising education levels and increased labor force participation at earlier ages (from 25 to 54 years old) across the cohorts studied. But the most recent group of college graduates that can be studied appears to be different. Whereas increased participation rates of older women seem explicable due to their higher levels of education and greater employment earlier in the lifecycle that for the most recent cohort appears partly due to other factors. The current challenge for research is to understand what these factors are and how they will impact the labor force participation at older ages of future cohorts.

Joshua Mitchell, Bureau of the Census

Experience, Tenure, and Leave-taking of American Women

In this project, Joshua Mitchell examines the accumulation of human capital over the lifecycle for successive cohorts of American-born women with a particular focus on newly constructed measures of years of labor market experience and tenure, in addition to traditional measures of educational attainment. Fertility history and leave-taking data will be used to understand how they influence the human capital accumulation process. These improved human capital measures can then be applied to estimating Mincer earnings equations, analyzing child earnings penalties, and gender wage gaps. The data for this project are constructed by combining the SIPP Gold Standard File panels 1984, 1996, 2001, 2004, and 2008 fertility history topical modules with Social Security earnings records (1951-2012 summary files and 1978-2012 detailed files) and the Census Business Register. A further goal will be to explore ways to add and make available these measures of experience and tenure to the Gold Standard File and other Census surveys such as the CPS-ASEC for future research.

Labor Force Transitions of Women over the Lifecycle, II

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

Older Women's Labor Market Attachment and Financial Security: A Cross-Cohort Perspective

Annamaria Lusardi and Olivia Mitchell explore cohort differences in older women’s past work and retirement by evaluating whether more recent generations were more attached to the labor market over their lifetimes from age 18-50, compared to earlier cohorts. Using the Health and Retirement Study matched with rich information on lifetime earnings records, the researchers employ various definitions of market work, including the number of jobs and of five-year jobs; the age when women first received labor earnings; the fraction of total years to age 50 that women received labor earnings; and the fraction of years by decade of age that they received labor earnings. They then test whether the cohort differences are significant after controlling on a variety of socio-economic variables. The researchers also examine differences in future work and retirement plans for the same cohorts. Specifically, they evaluate whether recent cohorts of older women are working more, and/or planning to retire later, as compared to earlier cohorts. Finally, the authors assess whether work patterns of older women are associated with a series of other factors, including having more debt close to retirement.

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 a lower proportion of the college-educated women in the more recent cohorts were teachers. This occupational shift could drive the recent increases in labor force participation because of how it altered pension eligibility (and wealth). Public school teachers are almost universally covered by defined benefit pensions and, generally, defined benefit pensions allow workers to retire at earlier ages than Social Security. Therefore, as the fraction of college-educated women without access to these defined benefit pensions expanded, the labor supply of college-educate women increased. Fitzpatrick provide evidence supporting this hypothesis and show 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. Moreover, there is no change in the labor force participation rates of college-educated women employed in other public sector jobs (who are also covered by defined benefit pensions).

Family Issues I: Joint Retirement and Couple Conflict

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

Survivor Benefits and Early Claiming of Social Security

Spouses often have conflicting interests over when to claim Social Security benefits and when to retire due, for example, to differences in their remaining life expectancies. Yet both the scholarly and popular literatures generally ignore the possibility of such conflicts. Simultaneous ("joint") retirement of spouses is often discussed, but virtually all discussions focus on leisure complementarities with no discussion of the possibility of spousal conflicts of interest regarding the timing of claiming Social Security benefits or leaving the labor force. Compton and Pollak posit that the increasing labor force participation of older married women may be due, in part, to changes in the within-couple decision surrounding pension claiming and retirement. Although they focus on social security, private pensions often allow early claiming or other options that allow greater current consumption but reduce payments to the surviving spouse. Moreover, conflicts of interest arise for retirement decisions as well as for claiming decisions. Women's bargaining power, knowledge of the implications of early claiming and early retirement, and the preferences of both spouses will affect both the claiming and retirement decisions. To clarify these decisions, their theoretical analysis begins with a highly stylized two-period model; authors assume that both spouses are alive in the first period, but that only the wife is alive in the second period, and that consumption in the first period is a household public good. Compton and Pollak's empirical analysis highlights the changing relative position of married women within the household and shows that women tend to retire at later ages when their bargaining power within the household is greater – when they have high relative education and fewer previous marriages. Authors also show that the link between early claiming and early retirement is weaker for women who are college graduates. This weaker linkage is consistent with a positive association between formal education and knowledge of the social security rules as well as with greater bargaining power.

Nicole Maestas, Harvard University and NBER

The Returns to Work and Women's Employment Decisions

This paper empirically observes that individuals in couples tend to retire around the same time. But because women tend to marry older men, the joint retirement of couples means that married women retire at younger ages than their husbands. This fact is somewhat at odds with theory that suggests women might retire later than men on account of the fact that they have longer life expectancies, and are more likely to have had shorter careers on account of having taken time out of the labor force for childrearing. By retiring jointly with their husbands, women may give up large accruals to pension benefits, (especially if they are approaching their peak earnings years) and they may forego opportunities to accumulate additional savings to fund their longer expected retirement period. Maestas uses all waves of the University of Michigan's Health and Retirement Study (HRS) to examine this question in two ways: first, she updates prior analyses that document the changing patterns of employment and retirement among older men and women. The updated analysis compares recently released data for the baby boomer cohort with the behavior of older cohorts. The author will next construct estimates of the return to work for women relative to their husbands to assess whether joint retirement entails foregone future returns to women, and whether the magnitude of any foregone returns has changed over time.

Family Issues II: Caregiving and Marital Stability

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

Women Working Longer: Labor Market Implications of Providing Family Care

The growing population of elderly in the United States brings with it a likely increase in the demand for long term care. The vast majority of such care is currently provided informally by family members and typically by daughters. This caregiving can be a substantial burden on the caregiver, potentially affecting labor force behavior, and eventually, financial well-being. Women may retire early, reduce hours, or switch to job with more flexibility at the expense of wages or benefits. In this paper Fahle and McGarry draw on 10 waves of data from the Health and Retirement Study, spanning 21 years, to examine the relationship between caregiving and labor market behavior. They find a significant reduction in the probability of work of approximately 4 percent, and a reduction in earnings of up to 16 percent, associated with the commencement of caregiving. However, authors find no effect of caregiving on hours worked. Looking at caregiving over a longer period of time, Fahle and McGarry continue to see a large reduction in earnings for caregivers, but no difference in participation. Finally, consistent with the lack of a long term effect of caregiving on labor force participation, authors find that episodes of caregiving are relatively short with just one-third of caregivers reporting providing care at two or more consecutive interviews.

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

Widespread and fundamental changes in divorce laws occurred between the late 1960s and the 1980s. Across states and over time, the ground for divorce shifted from mutual consent to unilateral choice, and property division rules were rewritten to promote equitable distribution of assets. These changes were associated with an increase in divorce risk especially for women born in the 1930s and 1940s who had married under the previous regime. This paper uses data from the 1984 to 2008 waves of the Survey of Income and Program Participation (SIPP) to document how the changing legislation affected work at older ages for the cohorts of women that experienced this "shock."
Olivetti and Rotz first document whether the probability of divorce changed across the lifecycle and whether this had long run consequences on women's work and retirement decision as well as economic security in retirement at age 55+. Authors then exploit the time and state variation in state laws governing divorce (mainly unilateral divorce) to identify the causal relationship between these decisions and divorce risk. In particular, they want to see whether women who were subject to different divorce laws over time exhibit different labor force participation and retirement at older ages and whether their behavior varies depending on their current marital status or by education. Olivetti and Rotz will also explore several mechanisms for the link between divorce and employment later in the life cycle such accumulation of human capital (via career/work choices or education) or financial capital (via pension funds or other investments) and fertility.

Social Security Regulatory Changes

Alexander Gelber, University of California, Berkeley and NBER; Adam Isen, Department of the Treasury; and Jae Song, Social Security Administration

The Role of Social Security Benefits in the Increase of Older Women's Employment Rate: Evidence from the Notch Cohorts

To understand trends in older 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 earnings, participation, and retirement by examining the Social Security "Notch" that cut women's average Old Age and Survivors Insurance (OASI) benefits substantially in the 1917 birth cohort relative to the 1916 cohort. The change led to sharply different benefits for nearly-identical women born one day apart. Using Social Security Administration micro-data on earnings in the full U.S. population by day of birth, authors find evidence for substantial effects of this policy change on older women's earnings, participation and retirement. The implications of these estimates are discussed to understand the shift in the 1980s from a falling to a rising employment rate of older women, which coincided with a decrease in the growth rate of Social Security benefits.

Motivations for Later-Life Employment: Pulls and Pushes

Joanna Lahey, Texas A&M University and NBER

Age and Race Discrimination and Women's Labor Force Participation

Although the black-white wage gap for young men is well-studied, less attention has been given to racial differences in the labor market experiences of women, older workers, and labor force attachment. In this paper, Lahey explores the different labor market experiences of black and white women with high school and/or some college by age. Using CPS data she traces out basic labor force outcomes by race and age for women with high school degrees and/or some college, finding that younger black women have greater labor force attachment but much greater unemployment rates than younger white women, and these differences change over time with older white women having greater labor force attachment than older black women and unemployment rates converging at older ages. However, reasons for unemployment diverge by age between the two races, with older white women being more likely to quit, be laid off, or be fired, while older black women are more likely to have left a temporary job or be returning from being out of the labor force. The wage ratios of black full-time high school graduate women compared to white full-time high school graduate women show upside-down U-shapes over age. These black/white wage ratios increase with successive cohorts for cohorts born 1923-1943, but the pattern reverses with later cohorts such that successive cohorts born 1948-1978 show decreasing black/white wage ratios with later cohorts. Taken as a whole, these results suggest that younger black women have worse outcomes than younger white women, despite greater labor market persistence, black middle-aged women's outcomes improve compared to younger black women's outcomes despite lower persistence, and older black workers have worse labor market outcomes and attachment overall. These results underscore the importance of age on outcomes by race and of race on outcomes by age.

Phyllis Moen, University of Minnesota

Should I Stay or Should I Go? Women's Voices on Work, Retiring, Care and Well-Being in Encore Adulthood

In this chapter, Moen, Kojola, and Kelly draw on qualitative data from in-depth interviews with women ages 50 through 75 as they consider their options, preferences, and plans. These are the years of what we call "encore adulthood," a new life course stage emerging after prime child-rearing and career building but prior to the infirmities associated with old age, made possible by medical advances and lifestyle changes improving population health and longevity. Women have always followed varied career and labor market pathways as they seek to manage career and care obligations. Their various routes have had tremendous long-term consequences, shaping resources and options in later adulthood. The encore adult years are shaping up to also be a time of varied paths, from conventional retirement exits to ongoing engagement in paid work and other meaningful activities. But this stage is also characterized by the unraveling of conventional career and retirement templates and protections, a competitive global economy, new digital technologies, and the large cohort of Boomers now moving through it. This is the first time in history in which many women and couples are confronting women's as well as men's retirement from career jobs, and they are doing so on a moving platform of these multi-layered changes. Drawing on women's own voices, the chapter identifies several pathways women follow, the logics and rationales for them, and their implications for women's well-being. It then considers the implications for what is a transforming yet still gendered life course, for future research, and for public and organizational policy development.

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