(UM12-03) - Accounting for Trends in Labor Force Behavior by Age: Common or Age-Specific Explanations?
The goal of the project is to study long-run labor force participation (LFP) trends of older and younger workers in a unified framework to determine the importance of common, relative to age-specific, factors. The analysis would develop a set of stylized facts concerning long-run trends in LFP by age, using data from the March Current Population Surveys for 1962 through 2011. It would estimate the effects of government policy, labor demand, demographics, and institutions. The policy variables of interest are Social Security rules that affect the level of benefits, increases in the benefit per year of delay in claiming, and the SSDI award rate. Changes in the returns to education and experience, measured by wage trends across education and experience groups, are key economy-wide factors that are likely to drive common labor supply movements across age groups.