Work and Retirement
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Our experts study workforce development, disability and employment, and the low-skill labor market. Our extensive work on retirement policy covers the many ways the aging of America will trigger changes in how we work, retire, and spend federal resources. The number of Americans age 65 and over will rise from about 13 percent in 2008 to 20 percent by 2040. The recession dealt a heavy blow to retirement accounts, leaving many older adults worried about their retirement security. Younger workers may have to shoulder higher tax burdens in the future if entitlement programs are expanded to meet need. Older adults can stabilize their finances by working past the normal retirement age. On average, working an extra year can boost annual retirement incomes by about 9 percent. Without reform, Social Security, Medicare, and Medicaid outlays, inflated by soaring health care costs and growing numbers of retirees, will squeeze out funding for other government services. Entitlement programs are on track to eat up an estimated 80 percent of all federal tax dollars by 2040. Policymakers can help protect Americans' retirement incomes by promoting savings and by revising policies that encourage early retirement, such as Medicare’s secondary payer rules, payroll taxes for older workers, and the Social Security retirement earnings test. Much of our employment research focused on low-wage workers—the most vulnerable group in a troubled economy. Low-wage and unemployed workers could find more stable, secure employment if they upgraded their job skills. Putting money back into job training, where federal spending has shrunk in the past 30 years, could jumpstart new state and local strategies to train low-income workers. Workforce development programs have raised earnings for low-wage workers, but federal spending has dropped by more than 70 percent since 1979. |
The Urban Institute has tracked job trends for four decades, following unskilled workers during the 1990s boom, welfare leavers taking jobs, and, more recently, older workers during the recession.