The COVID-19 pandemic may be causing a large number of Americans to speed up their retirement plans, a recent study found.
Faculty members at the University of Chicago, the University of Texas – Austin and the University of California – Berkeley analyzed Nielsen data collected after the crisis began, in an effort to learn more about the fast-changing U.S. labor market.
They found that while the percentage of Americans participating in the workforce dropped by a major 8 percentage points between January and April – from 64.2% to 56.8% – the official unemployment rate increased by only two percentage points during that time period.
They also conducted surveys both before and after the pandemic started, and found about the same 8% increase in the number of respondents who said they had stopped working because they had retired. Less than 2% of respondents said they were no longer searching for a job because they couldn’t find one.
The researchers said that while there are likely many reasons behind the surge in retirements, the most important one is probably the fact that older people are at highest risk from the virus. Because of the threat to their own health, many are choosing to bow out of the workforce now, earlier than they planned. While this may change later on if the threat diminishes, they added, the mass exit of these older workers could have a huge impact on the American labor market.
The U.S. Bureau of Labor Statistics previously had estimated that by 2024, about 44 million workers, or 25% of the labor force, would be age 55 or older. Roughly 13 million of that total would be 65 or older, the bureau claimed.
However, the study concluded, millions of early retirements due to coronavirus could end up changing those estimates dramatically.