The puzzle of later male retirement

For decades until 1985, the share of older American men who worked for pay trended downward. Since 1985, though, that share has been stable or rising. By 2001, the new trend in male retirement behavior had added 2 million workers to the U.S. labor force. Since the number of older men in the United States will increase dramatically as the baby-boom generation ages, the new trend could become even more significant for the U.S. economy in the future.> Understanding male retirement behavior is important to both monetary and fiscal policymakers. Later retirement affects monetary policy by increasing potential output. It also affects fiscal balances by boosting tax revenues and reducing the cost of earnings-tested benefits such as Disability Insurance and Medicaid.> Economists have put forth several theories to explain why American men are retiring later. One theory is that Social Security reforms have encouraged older men to work more. Another is that the decline in the number of workers with defined-benefit pensions has enabled men to continue working longer. A third theory is that the slower growth of the overall U.S. labor force has increased older men?s employment opportunities.> Johnson tests whether these theories explain the changed male retirement trend. He concludes that Social Security reforms have increased the labor supply of men aged 65 and older, but that the abrupt change in the trend of male retirement ages in 1985 remains a puzzle.