Yesterday I wrote about droves of older Americans who’d checked out of the workforce in April, perhaps because some were unemployed for a long time and had given up looking in a weak jobs market. But a few economists who’ve been studying the labor force see a more positive trend: they believe many of these people just plain retired.
Economist Mark Zandi, in a USA Today report, says more employed workers than unemployed dropped out of the labor force last month. He says that’s strong evidence that many retired rather than stopped hunting for a job.
Marisa DiNatale, director at Moody’s Analytics and Zandi’s colleague, gave AARP the raw numbers: 6.7 million people dropped out of the labor force in April. Of those, 4 million had been employed the previous month. There’s no age breakdown on that data, so DiNatale acknowledges that “assumptions are being made.”
The 6.7 million, by the way, is the gross number of people who exited the labor pool last month. On Friday, the Bureau of Labor Statistics reported that 342,000 left the work force, a “net figure,” because the BLS takes into account those who entered the labor pool, such as college graduates, and those who exit.
DiNatale says she presumes that many of the 4 million workers who dropped out of the labor pool retired, because if they’d been laid off, they’d still be counted by the government as being in labor force.
“These are the people who went from being employed in March to out of the labor force in April. It makes sense that people who had a job are no longer in the labor force and not looking for work,” she says.
DiNatale also says that the numbers of “discouraged workers”—people who’ve given up looking—actually dropped since late 2010. At the same time, the rate of layoffs has fallen.
In fact, the trend wasn’t just apparent in April. As the economic recovery pressed on in recent months, however slowly, government data also has shown that substantial numbers of people were employed one month and then out of the workforce the next. That’s consistent with millions of boomers turning 66 this year, the age at which full Social Security benefits can be collected.
Dean Maki, an economist of Barclays Capital, told USA Today that 19 percent of people who were not in the labor force and said they didn’t want jobs were 55 or older, up from 18 percent when the recession started. He says that jibes with the rise in Social Security recipients.
photo credit: NGOA&ENGAF via flickr.com