Author: Steven Pennington
The national labor force participation rate has been declining for the past decade, and the retirement of Baby Boomers, who began turning 55 in 2001, has been cited by some to explain part of this phenomenon. However, the labor force participation rate among Americans aged 55 or older has been on the rise since the mid-1990s until peaking in 2012.
These two trends may be difficult to square. How can the participation rate of Boomers be rising even as their retirements are driving the overall participation rate down? A Wall Street Journal blog post recently addressed this confusion, explaining that while people aged 55 or older are increasingly likely to remain in the labor force, most still retire. And as the massive Boomer generation ages into the post-54 age group, it increasingly contributes to declining national labor force participation overall.
A similar story seems to be true in North Carolina, where our overall labor force participation rate has been in general decline since 2001. Yet between 1999 and 2013, the labor force participation rate of North Carolinians aged 55 or older increased by 3.1 percentage points (after peaking in 2007). In addition, between 1999 and 2013, the portion of North Carolina’s civilian noninstitutionalized population made up by those aged 55 or older has risen 5.8 percentage points.
The growth in our state population’s portion of people aged 55 or older likely explains part of our declining overall labor force participation rate. Even as that group’s own participation rate has risen in recent years, it’s still the case that most North Carolinians aged 55 or older are not in the labor force (64.1 percent fell outside the labor force in 2013, compared to 18.2 percent for those aged 25-54).
As Boomers move into their retirement years, our state’s population will increasingly fall into the 55+ age group. This demographic shift is likely to have significant implications for both the private and public sectors of our state and nation. Further analysis of these trends is sure to follow in future LEAD Feed posts.