Forecasting Labor Force Participation and Economic Resources of the Early Baby Boomers

Published: 2008

Abstract

 

This paper forecasts the retirement patterns and resources of the Early Baby Boomers by estimating forward-looking dynamic models of labor force participation, wealth accumulation and pension and Social Security benefit claiming for older workers using seven waves of HRS data. The two most important innovations of our proposed approach are the use of alternative measures of pension entitlements and the associated incentives, and accounting for subjective expectations about future work. Our main findings are that the Early Baby Boomers will work longer and claim Social Security later.

 

Key Findings

    • We find that Early Baby Boomers (those born 1948 to 1953) will work longer and claim Social Security later than the original HRS cohort (those born 1931 to 1941).
    • Between ages 55 and 63, the fraction of women working full-time is predicted to be almost 10 percent higher on average; from age 64 to 66 it is about 5 percent higher than that of the HRS cohort.
    • The differences for men appear mostly in their sixties and seventies; they amount to increases in full-time work of about 5 percentage points on average.