NY24-11: Accelerated Aging and Early Retirement Due to COVID-19: Is it Happening and How Are Different Racial/Ethnic Groups Affected?

Abstract/Specific Aims:

The ongoing wave of retirement by the baby boomers represents a significant generational transition in U.S. labor markets with implications for entitlement programs such as the Social Security Old Age program (OA). Given the unusually large size of this generation (approx. 76 million), the impact will likely be felt for many years. Social Security payroll contributions from (smaller) younger cohorts may fail to offset the dwindling boomer contributions, while benefit outlays will grow exponentially for years as more boomers claim OA (Maestas et al. 2023; Munnell, 1980; Sheiner, 2021).

The COVID-19 pandemic, which severely affected the health and employment of boomers, likely accelerated these trends. While in 2018 the majority of boomers were still in the labor force—and at 29%, participation among 65-72 year-olds was highest in five decades (Fry 2019)—many boomers have since retired. In 2021 (QIII), 66.9% of Americans aged 65-74 were retired, up from 64% in 2019 (Fry 2021), consistent with COVID causing boomers of all ages to retire at faster rates than just before 2020.

Existing research on the causes and consequences of boomer retirement is mainly pre- pandemic (Sheiner 2021; Maestas et al. 2016). To fill this important knowledge gap, we propose a systematic analysis of how COVID accelerated aging, labor force exit, and SSOA benefit take-up in these generations, with an emphasis on racial/ethnic and gender differences. Using nationally representative data on boomer cohorts from the Health and Retirement Study (HRS), we will estimate longitudinal models of mental and physical health, work, and retirement (SSOA benefit take-up).