As life expectancy has increased, expectations for longer retirements have also increased. But new research suggests the reality is far more complicated.
Lisa BerkmanDirector of Harvard Center for Population and Development Studies, led a team that investigated the issue in a project sponsored by the Sloan Foundation and produced the recent book “Overtime: America’s Aging Workforce and the Future of Working Longer.” The collected papers, co-edited by Berkman and Beth Truesdale, a research fellow at the Upjohn Institute for Employment Research and a visiting fellow at the Harvard Population Center, examine the push to work longer — stemming both from retirement programs like Social Security and the pressure of personal finances — for people to make sure they have enough to last for years. We spoke to Berkman about the results. The interview has been edited for clarity and length.
Gazette: What challenges do we, as a society and as individuals, face as people enter a retirement that may last decades rather than years?
Berkman: For a long time we assumed that working longer was the answer, and that most people can do it because life expectancies are longer. Then we realized we had a huge undercount of people who don’t have a job and don’t show up in the employment statistics. We asked ourselves at the end of the Sloan Foundation project on working longer: “Who haven’t we counted? Who hasn’t been in all the numbers and all the retirement projections? And we realized that’s all the people who left the workforce in their 50s or early 60s. And – while their life expectancy is around 76 for men and 81 for women, with a gap of around 10 years between the highest and lowest incomes – they rarely have the financial means to live for decades beyond their working years or, conversely, they may not live long enough to obtain full social security benefits. So this idea of financial security for many retired workers isn’t really viable because so many people are actually unable to work any longer. This was the “aha moment” of our project, finding out that many, many people won’t be able to work even into their 60s, let alone into their late 60s.
Gazette: How important is recognizing workforce heterogeneity?
Berkman: Heterogeneity is fundamental to meeting the challenge of working longer. This involves two elements, one of which is that we do not count in employment statistics people who are not looking for work. Thus, people who left the labor force much earlier are underestimated. They are almost invisible. And second, that non-work is shaped by huge economic and educational gradients, so the people most likely to leave the workforce are people with less education, in more physically demanding jobs, in less secure jobs. and more precarious. works. And that only produces more inequality.
Gazette: And part of the problem isn’t just that these people aren’t working. It’s also that there are a lot of them. Is it correct?
Berkman: It’s about half. This was really the main discovery of the book. Only about 50% of people have a stable job until their 50s. About another third, around 35%, enter and leave the labor force in their 50s. And the rest just doesn’t work. This applies across income and education gradients, but hits less educated men and women the hardest. The amazing thing is that if you’re not stably employed into your 50s, the chances of you being stably employed into your 60s are slim. Furthermore, while 80% of those in stable employment will work into their 60s, only a third of those in unstable employment and 4% of those not in work in their 50s will ever find another job.
Gazette: This therefore challenges the belief that we live longer; are we healthy longer and can we just work longer to pay for our long pensions?
Berkman: This birth cohort – people who are now in their 40s or 50s – are actually less healthy than people born a decade or two earlier when they were in their 40s and 50s. But what is surprising is that people who drop out of the labor market for health problems account for only part of the job loss. There are at least two other reasons that matter a lot. One is caregiving and family dynamics. This was especially true during COVID when people had to care for elders or their partners or children. Caregiving drastically reduces people’s ability to work regularly in their 50s. The other thing is the nature of the work itself. Good jobs are really essential. They give more control over schedules, more flexibility in the workplace, less precariousness. So it is the nature of the work, the caregiving and the health losses of this next generation of middle-aged workers that are of concern. These things account for a big chunk of job loss, and health isn’t the only factor here.
Gazette: Is there a solution?
Berkman: One concerns the creation of “good” jobs long before retirement. We need to think about good jobs for people in their 40s and 50s if we want people to stay in the workforce. We must create working conditions today that will allow people to remain in the labor market, even if they have health problems or caring responsibilities. This balance between work and life or work and family is really essential. The second bucket is, “What can we do about retirement?” Working conditions alone will not prevent us from thinking about retirement policies. One thing we say repeatedly in the book is that “work politics is retirement politics.” These two things are two sides of the same coin. We need to address both sets of policies.
Gazette: What are some specificities of policies that would improve work, and therefore retirement?
Berkman: Our workplace policies are defined by three characteristics that we believe can be improved. One of them is schedule control. The control of working hours turns out to be very, very important. Many countries have rules that include things like paid sick leave, flexible and part-time working, regular hours that allow people to have more control over their schedules. In an intervention at The Gap, colleagues in Chicago showed that giving workers more predictability and some ability to define when they were due home, to have schedules a week in advance – not just-in-time schedules – helps workers stay on the job. and improves productivity. All of our job promotion policies may not be good for the bottom line, but many of them can be. We really want to know more about when these things go together and when do they diverge? When do good jobs actually cost more?