	Introduction

The United States is projected to experience two major demographic changes that could substantially affect labor markets in future years. The demographic changes are the aging of the U.S. population and the slowdown in U.S. population growth. Both are expected to raise the total dependency ratio (the number of younger and older persons relative to the economically productive population). Healthy older individuals face a number of impediments to spending more years in the labor force, however. Late career employees who involuntarily lose long-held jobs through no fault of their own could also be among those who have the most difficulty delaying retirement. Those older persons whose jobs are terminated through no fault of their own often have subsequent labor market outcomes that also compare unfavorably with nondisplaced older workers. The Rate of Reemployment

The displacement of older workers ends with comparatively few finding new jobs. The lower employment rate of older displaced workers compared to either younger workers or to older nondisplaced workers appears related to the restricted opportunities that older jobseekers typically encounter. Older persons' comparatively limited access to jobs could be due to age discrimination (which is difficult to measure directly because of methodological issues) and to lawful considerations of employers. Post-Displacement Compensation

Relatively more older displaced workers who find new full-time jobs earn less than they had on the full-time jobs they lost. Policy Responses

The Dislocated Worker program under Title I of the Workforce Investment Act (WIA) and the Trade Adjustment Assistance (TAA) program are meant to help displaced workers obtain new employment by providing job search assistance and training among other services. (A wage supplement is sometimes referred to as wage insurance.) Thus, in addition to enabling displaced workers to remain in the labor force, a wage insurance program might reduce UI costs. It should be kept in mind that wage insurance and training operate on the supply side. The only federal program that focuses on the seemingly limited job opportunities of older unemployed workers is the Senior Community Service Employment Program (SCSEP), Title V of the Older Americans Act. It creates part-time public service jobs for persons aged 55 and older who have low incomes and poor employment prospects. To the extent that demand-side rather than supply-side obstacles prevent substantial numbers of older displaced workers from obtaining new jobs, then raising the eligibility age of Social Security may not succeed at delaying retirements among members of this group. Not only might older displaced workers be unable to ameliorate potential shortages by extending their working lives, but they also might live in reduced circumstances and qualify for means-tested government benefits as a result of their unplanned retirements. Further, older workers voluntarily retiring from long-held jobs who want to extend their stay in the labor force by taking non-career (bridge) jobs could be thwarted from doing so by these same demand-side obstacles.
The United States is projected to experience two major demographic changes that could greatly affect labor markets in the future. The demographic changes are the aging of the U.S. population and the slowdown in population growth. Both are expected to raise the total dependency ratio (the number of younger and older persons relative to the economically productive population). The possibility of a rising ratio has led to concern about the nation's ability to maintain the current standard of living. One way to lessen the dependency ratio's expected increase is for people to spend more years in the labor force.
Older workers who involuntarily lose long-held jobs through no fault of their own could experience great difficulty delaying their retirement. Older displaced workers usually have labor market outcomes that compare unfavorably with older nondisplaced workers, such as long-lasting lower employment rates. Older workers often are more adversely affected by displacement than younger workers as well. For example, older workers disproportionately end displacement by exiting the labor force than by finding new jobs.
The lower employment rate of older displaced workers appears related to their restricted job opportunities. The limited access of older jobseekers could be due to age discrimination and to lawful considerations of employers (e.g., compensation packages with health insurance). For their part, the likelihood that older displaced workers will earn considerably less upon reemployment dampens their motivation to find new jobs.
Both the Dislocated Worker program of the Workforce Investment Act and Trade Adjustment Assistance (TAA) are designed to actively help eligible displaced workers, regardless of age, find new jobs (e.g., by providing training). In addition, the Alternative Trade Adjustment Assistance program for TAA-eligible older workers offers a wage supplement to those who become quickly reemployed in full-time jobs that pay less than their lost jobs. (A wage supplement sometimes is referred to as wage insurance.) Retraining and wage insurance operate on the supply side. The only federal program that addresses older workers' reemployment difficulties from the demand side is the Senior Community Service Employment Program (Title V of the Older Americans Act). It creates part-time public service jobs for older persons with low incomes and poor job prospects.
To the extent that it is more demand-side than supply-side obstacles that prevent substantial numbers of older displaced workers from obtaining new jobs, raising the Social Security eligibility age may not succeed at delaying retirements among members of this group. Not only might older displaced workers be unable to ameliorate potential labor shortages by extending their working lives, but they also might live in reduced circumstances and qualify for means-tested government benefits as a result of their unplanned retirements. Further, older workers voluntarily retiring from long-held jobs who want to extend their stay in the labor force by taking non-career bridge jobs could be thwarted from doing so by these same demand-side obstacles.