Research: Does Health Care Reform Affect Labor Participation by Older Workers?

In a blog posting on MarketWatch, Alicia H. Munnell follows up on research published by Center for Retirement Research at Boston College on the effects of Massachusetts’ health-insurance reform. According to Munnell, analysis "yielded an interesting result. It showed that, compared to nearby states, 55-to-64-year-old males in Massachusetts experienced the largest decline in labor force participation between the time before and after the health insurance reform." Specifically, the state Massachusetts saw a decline in labor force participation for that group of 1.3 percentage points while the rest of the nation saw an increase of 1.7 percentage points.

One possibility for the difference could be the ability of those men to acquire affordable health insurance without having to wait for Medicare. In support of this theory, Munnell notes that "prior to Massachusetts’ health reform, 93% of 55-to-64-year-old males who were out of the labor force had health insurance; after the reform that number had risen to 97%."

Munnell then contemplated extrapolating these results across the country, in light of the Affordable Care Act. She said that, "[i]f unhealthy workers—or people who simply hate their jobs—were able to leave the labor force because of expanded access to health insurance, economists argue that this reduction may not be a bad thing." However, "if health reform alters the financial incentives to work through higher marginal income taxes on labor, as some have argued will be the case under the ACA, then a reduction in labor force participation may be a negative outcome of health reform."

Source: MarketWatch "Will health reform affect older workers?" (June 11, 2014)

Massachusetts: Aging Workforce and Skills Gaps in Metros South/West Region

The first in a series of skills gap reports prepared as a joint project by Commonwealth Corporation and the New England Public Policy Center of the Federal Reserve Bank of Boston has been released. According to "Labor Market Trends in the Metro South/West Region," the Metro South/West Region--which includes major workforce centers like Marlborough, Framingham, Natick, Franklin and Hopkinton--faces the demographic challenges of an aging population and potential shortfalls in workers with the required educational levels.

The area is one of the oldest regions in the state; in 2008-10, nearly 50% of the region’s civilian labor force was 45 years of age or older, suggesting that the region’s businesses are facing a potential overall shortage of younger workers to replace baby boomers as they retire.

In the past decade, there has been strong growth in the share of workers who are 45-54 years old and 55-64 years old. In addition, there have been an increasing number of workers who are 65 years and older and in the labor force. At the same time, there has been a declining number of workers between the ages of 25 and 34 and between 35 and 44.

With respect to unemployment, the report notes:

A larger share of the unemployed in Metro South/West is over the age of 45, compared with Massachusetts and the nation. This is a consequence of the region’s older population. At the beginning of the decade, when the unemployment rate was at 2.1 percent, the unemployed population was largely concentrated among 25-54-year-olds. As the region’s population increased in age over the decade and the Great Recession took hold, the share of the unemployed age 45 or older grew to over 50 percent.

Source: New England Public Policy Center of the Federal Reserve Bank of Boston Executive Summary (June 26, 2012)

Massachusetts: Two Reports Focus on Rise in Older Worker Population and on Retaining Older Workers

Commonwealth Corporation released two new reports focusing on the aging population in Massachusetts, its effect on the labor supply, and strategies for retaining older workers. Among other things, according to the reports, by 2020, almost 27% of Massachusetts workers will be age 55 or older, Already some industries have a high percentage of older workers--in education and health services, almost a quarter of employees are 55 or older, and in repair, maintenance and personal services, the number is 28.2%.

One report--“The Increased Presence of Older Workers in the Massachusetts Labor Market”--provides an overview of trends in the labor force among the nation's older population and presents more recent labor market outcomes of older workers in the nation and in Massachusetts. This report also examines the industries and occupations in which older workers in Massachusetts are employed and the change across the different industries/occupations.

The other report--“Retaining Older Workers”--summarizes the projects that participated in Commonwealth Corporation's Older Worker Retention Strategies Grants funded by the Workforce Competitiveness Trust Fund and presents findings and lessons learned from the pilot projects.

The reports are joint projects of Commonwealth Corporation and the Center for Labor Markets and Policy at Drexel University and Community Matters, respectively.

Sources: Commonwealth Corporation News Release (July 20, 2011); Boston Globe "A jobs pinch for the ages" (July 21, 2011)

Massachusetts: Policy Brief Calls on State Leaders To Capitalize on Coming Age Wave

The Boston College Center on Aging & Work and AARP have issued a policy brief calling on Massachusetts state leaders to include 50-plus workers in the mix as the state develops solutions to stimulate its sagging economy. The policy brief--21st Century Age Demographics: Opportunities for Visionary State Leadership--provides information to help state leaders nationwide examine the connection between aging and work, and how changes in the labor force participation of older adults will affect their states.

“State leaders must play an active role in developing policy and initiatives to capture the value of 50-plus workers,” says Marcie Pitt-Catsouphes, co-director of the Center on Aging & Work at Boston College. “Most of the attention paid to the aging of the workforce has focused on national trends. However, the thought leadership for economic and workforce development occurs at the state level.”

Among other things, the policy brief suggests raising awareness, encouraging business leaders to respond, expanding resources, benchmarking progress, and positioning Massachusetts as a model employer as ways in which to to advance public sector innovation and increase employment options for 50-plus workers.

Source: Center on Aging & Work at Boston College Press Release (April 2, 2008); AARP Massachusetts News Release (April 2, 2008)

Civic Ventures Report Highlights State Initiatives on Capturing Boomer Energy

A report issued by Civic Ventures shows that leaders of several state governments are taking the initiative to develop policies and programs that make the best use of boomer experience. The report--"Building an Experience Dividend: State Governments Lead Call to Engage Boomers"--focuses on developments in five states:

• Arizona and its Mature Workforce Initiative to develop policy recommendations and launch new programs, such as a certification program given to businesses deemed "mature-worker friendly."
• California, whose eServices offices focus on matching boomers’ desire to serve with specific labor shortages, such as the demand for math and science teachers and qualified managers in the public sector.
• Maryland, which enacted a Baby Boomer Initiative Act in 2007, creating the Boomer Initiative Council, which is tasked with developing a strategy to keep boomers engaged in their communities through work and volunteer opportunities.
• Massachusetts, whose governor has called for the creation of a Commonwealth Corps to give residents new opportunities to make significant commitments to service and in which legislation
  is being advanced that would create a Mature Worker Council.
• New York, where a package of eight bills has been introduced that are hoped will jumpstart the state’s efforts to prepare for an aging workforce.

In addition, eight states are participating with the National Governors Association and Civic Ventures in a year-long program to find ways to tap skills of older workers.

Source: Civic Ventures News Release (February 7, 2008)

Additional Source: USA Today "No time to relax: States want new retirees' experience" (February 22, 2008)

Massachusetts Facing Shrinkage of Prime Working Age Populaton

A study released by the Massachusetts Institute of a New Commonwealth (MassINC) and the Center for Labor Market Studies at Northeastern University has found that the Massachusetts labor force declined by 1.7% from 2003 to 2005 while the national labor force expanded by 3.1% and that most of those who left the labor force were men in two age groups--16- to 24-year-olds and 35- to 54-year-olds.

Thus, according to the study--“Mass Economy: the Labor Supply and Our Economic Future”--one fo the three critical factors for growth in the economy will be incorporating more older workers into the workforce. The combination of the aging of the baby boom generation the declining number of workers in what is considered the “prime working age years” (25-54 years old) will have the result that, in particular between 2010 and 2015, the graying of the Massachusetts labor force will accelerate further.

Source: MassInc and Center for Labor Market Studies Research Report (December 2006)

Other Sources: The Enterprise "Shrinking labor force threatens region" (December 10, 2006); Worcester Telegram "Report says Massachusetts is losing workers" (December 10, 2006)

Massachusetts: Boomers Poised To Redefine Retirement

Massachusetts Institute for a New Commonwealth, known as MassInc, has issued a report "A Generation in Transition: A Survey of Bay State Baby Boomers" in partnership with Princeton Survey Research Associates Intl. finding that, above all, boomers appear poised to redefine retirement. From a survey of over 1,000 boomers, MassInc reports that boomers expect to reverse the trend toward earlier withdrawal from the labor force by delaying their retirement and continuing to work at least parttime even after they retire. Boomers’ views about their retirement years are shaped by their finances today, which are not as strong as is often believed--excluding the equity in their homes, 30% have saved less than $50,000 for retirement, including 13% who have no retirement savings at all. Among those boomers who are planning to work after they retire, at least 39% expect to work out of financial necessity, not by choice.

In addition to the report, a roundtable discussion of it is available from WGBH.

Source: Press Release MassInc (November 2005)