The COVID Retirement Boom

Abstract

We investigate the source, magnitude, and unevenness of the procyclical forces that shape labor force participation, i.e., the participation cycle, which are important for the implementation of the maximum employment mandate. We show that these forces can be analyzed in real time using a flow decomposition of the changes in the labor force participation rate. The decomposition reveals that the source of the participation cycle is fluctuations in job-loss and job-finding r a tes, r a ther t h an c y clical m ovements i n l a bor f o rce e ntry and exit rates. The magnitude of the participation cycle is large. Cyclical downward pressures on employment from participation are two-thirds that of unemployment. Moreover, the participation cycle delays the recovery in employment because it lags the unemployment cycle. It also amplifies t h e u n evenness o f t h e i m pact o f r e cessions. G r oups t h at s e e large increases in their unemployment rates also experience more pronounced participation cycles. Despite differences in their magnitudes, the source of the participation cycle is the same for all groups. Application of our method to the COVID-19 Recession suggests that, as of June 2021, the bulk of the drop in the participation rate since the onset of the pandemic is cyclical and that the cyclical recovery in participation likely will trail that of the unemployment rate.JEL classification c o des: J 6, J20.

Confronting a post-pandemic new-normal—threats and opportunities to trust-based relationships in natural resource science and management

“…The COVID-19 pandemic accelerated a generational retirement ( Faria e Castro, 2021 ) and fast-tracked successional plans within many North American natural resource agencies and likely elsewhere. Many incoming agency staff have never met one another in person, nor have they had the opportunity to build meaningful relationships with academics, rightsholders, or stakeholders.…”

Potential Impacts of the War in Ukraine on the Fourth District

“…2 The percentage of the population aged 60 and older has also increased because the large baby boom generation started reaching this age range in 2006. As noted above, recent studies have highlighted the role that retirements have played in the drop in the size of the US labor force since the start of the pandemic (Briggs, 2021;Faria e Castro, 2021;and Kaplan et al, 2021). Estimates for the number of retirements that occurred during the pandemic, above and beyond the number of retirements expected based on prepandemic trends, range from 1.5 million to 2.4 million individuals.…”

“…Broadly speaking, changes in the overall size of the labor force come from changes in labor force participation rates (LFPRs), changes in the demographic makeup of the population, and changes in the size of the population. Research has documented the role of changes in LFPRs, especially the jump in the number of retired people (Briggs, 2021;Faria e Castro, 2021;and Kaplan et al, 2021) and the drop in the LFPR of mothers of young children (Aaronson andAlba, 2021, andPitts, 2021). However, demographic trends have also constrained the size of the labor force.The labor force is defined as the number of people aged 16 and older who are either employed or unemployed, where unemployed is defined as not having a job, being available for work, and having actively searched for a job in the past four weeks or waiting to be recalled from a temporary layoff.Unless otherwise indicated, when we refer to the population or labor force, we are referring to people who are neither institutionalized nor in the military (which is called the non-institutionalized civilian population) and who are aged 16 and older.…”

“…Broadly speaking, changes in the overall size of the labor force come from changes in labor force participation rates (LFPRs), changes in the demographic makeup of the population, and changes in the size of the population. Research has documented the role of changes in LFPRs, especially the jump in the number of retired people (Briggs, 2021;Faria e Castro, 2021;and Kaplan et al, 2021) and the drop in the LFPR of mothers of young children (Aaronson andAlba, 2021, andPitts, 2021). However, demographic trends have also constrained the size of the labor force.…”

Changes in International Immigration and Internal Native Mobility after Covid-19 in the US

“…The employment rate fell dramatically in the few months after March 2020 with an especially sharp impact on female participation (Albanesi and Kim 2021). Older workers retired in large numbers (Faria-e Castro et al 2021), and a substantial proportion of in-person work was replaced by remote work (see Barrero et al 2020). Several of these changes and their consequences lasted well after the pandemic's recession, into 2022 (see Parker et al 2022).…”