The Effect of Economic Conditions on the Employment of Workers Nearing Retirement Age

There has been a dramatic decline in labor force participation of older men since the early 1970s. A large literature evaluates the potential contribution of changes in pension benefits, health, wealth, and retirement preferences to explaining these trends. Yet, during the same period there have been important developments in the United States labor market, such as changes in industry decomposition and a strong decline in manufacturing employment, a rise in the returns to skill, and increases in inequality. Although these changes have potentially important implications for retirement behavior, they have found less attention in the literature.