What You Need to Know
- Despite more people unretiring now, the numbers won’t do much to alleviate the labor shortage, two researchers found.
- Using regression analysis, it was found roughly 300,000 more retirees may come back to work, but there's a 4 million person shortage.
- Today may be different than in past, as the pandemic has made remote work acceptable and attractive.
When asked what could help ease the labor shortage right now, economist Greg Valliere replied recently: “We need more immigrants.”
He may be right, because despite more people “unretiring” now, those numbers won’t do much to alleviate the labor shortage, according to a new Center for Retirement Research of Boston College paper, “Will Unretirement Help Solve the Labor Shortage?”
Authors Geoffrey T. Sanzenbacher and Matthew S. Rutledge, both associate professors of the practice of economics at Boston College, researched to see where new (or old) labor could be found.
With roughly 15 million people ages 55 to 70 at any given time indicating they are retired and the U.S. economy facing a labor shortage, “the potential return of these retirees to the workforce is an important question,” the authors state.
“On one hand, it seems likely that many retired workers could be enticed to return given that the job opening rate is at an all-time high. On the other hand, it is possible that retirement is not a choice easily undone,” they explained.
A Look Back
Past research shows that rates of year-over-year returns of retirees going back to work is less than 5% of those over age 62.
The difference between now and this past study, the authors state, is that retirees may come back in larger numbers “given the current economic recovery.”
For example, as of October 2021, there was a 6.9% job opening rate in the U.S, according to data from the Bureau of Labor Statistics. Previous research, however, shows that whether a good economy will drive retirees back is unclear, the authors write.
What seems to drive the return to the workforce isn’t so much economic conditions but rather “part of a plan right from the start, after taking time off from a prior job to recover from burnout,” the authors state.
That said, the authors wanted to see if there was a relationship between tight labor force conditions and a return to work by retirees. Using the March Annual Social and Economic Supplement to the CPS (March 2021), the authors explored how “the unretirement rate” has varied over the past four decades.