Labor Market Status of Older Males in the United States, 1880-1940

Abstract

This paper examines the labor market status of older males in the era of industrialization, focusing on the question of how the extent of pressure toward retirement varied across different occupations, and how it changed over time. A comparison of hazard of retirement across occupations shows that men who had better occupations in terms of economic status and work conditions were less likely to retire than were those with poorer jobs. This result tends to reject the recent view that retirement was more voluntary than forced as early as a century ago. The difficulty faced by older workers in the labor market, as measured by the relative incidence of long-term unemployment, was relatively severe among craftsmen, operatives, and salesmen. In constrast, aged farmers, professionals, managers, and proprietors appear to have fared well in the labor market. The pattern of shifts in the occupational structure that occurred between 1880 and 1940 suggests that industrialization had brought a growth of the sectors in which the pressure toward departure from employment at old ages was relatively strong.

Industrial Characteristics and Employment of Older Manufacturing Workers in the Early-Twentieth-Century United States

“…Lee (2002) has estimated that the decrease in the labor force employed in farming accounted for nearly a quarter of the decline in the LFPR of men aged 60 and older between 1880 and 1940. Lee (2005) has suggested that industrialization was responsible for growth of the sectors that brought about the strong pressure on old age employment.…”

“…Long-term unemployment of older male workers in 1900 greatly reduced their chances of remaining in the labor force by 1910 (Lee 1998). Older men who had better occupations in terms of economic and work conditions in 1900 were less likely to retire by 1910 than were those with poorer jobs, suggesting that retirement in the past was perhaps more forced than voluntary (Lee 2005). A number of studies on Britain and France in early twentieth century also support the view that older persons in the era of industrialization, especially those in the working classes, were generally poor and that their retirement decisions were probably more strongly determined by the absence of appropriate employment opportunities, rather than substantial assets or nonlabor income (Baines and Johnson 1999; Bourdieu et al 2011; Johnson 1984, 1994).…”

“…Lee (1998) found that elderly men who were unemployed six months or more in 1900 were more likely to be out of gainful employment ten years later. Lee (2005) suggested that older workers were more likely to leave their job between 1900 and 1910 if initially employed in an occupation in which the relative incidence of long-term unemployment was higher. In the light of these results, a greater probability of long-term unemployment among older workers in the early twentieth century may be regarded as indicative of a greater pressure toward leaving the labor force.…”

“…Some minor modifications have been made to consider some differences in data. The log value of Union Army pensions was added to consider the previous results that stated that Union Army pensions greatly increased the probability of retirement of veterans (Costa 1998; Lee 1998, 2005). Because the amount of Union Army pensions was determined based on health status, age, and military experiences, this variable might capture the effects of both nonlabor incomes and health.…”

“…The study may add new quantitative evidence to the literature regarding the labor-market status of older workers and the nature of retirement in the past. Relatively, there are abundant microlevel studies pertaining to long-term unemployment and retirement of older male workers in the early-twentieth-century United States (Carter and Sutch 1996; Costa 1998; Lee 1998, 2002, 2005; Margo 1993; Moen 1994). However, this study is distinct from previous works because it examines the roles played by industrial features, together with personal characteristics.…”