The Workforce - Baby-boomer Retirement Effects

The chart shows the occupations with the largest increases in worker retirement from 1993-1998 to 2003-2008 (the curve), the number of jobs created by retirement in the 2000-2010 period, and the total new job openings in the same period.

To understand the curve, consider the following. In the 1993-1998 period, 5,000 airline pilots and navigators retired. In the 2003-08 period, 14,000 will retire, a 180% increase between the two periods¹. High rates of growth in retirement are due to many factors — the retirement programs offered as incentives to highly skilled individuals or in occupations where age reduces performance (as in piloting craft), pension plans, the wealth of the group as a whole, and, sometimes, the stress factor inherent in the job.

Those retiring have to be replaced — and sometimes not. In one of these occupations, Social Welfare Eligibility Clerks, those retiring will exceed those needed — indicating a shrinking occupation (see arrow). In all other cases, some, but not all of the jobs, will be created by the need to replace those retiring.

These occupations, all with high retirement rates, are not equally affected by the Baby Boom's withdrawal from the work force. Industrial Engineers, Airline Pilots/Navigators, and Supervisors of Police and Detectives will generate the largest demand for people by retirement; 79%, 71%, and 67% of jobs, respectively, will be created by retirement.

By contrast, Postal Clerks, Management Analysts, Social Workers, and Lawyers are predicted, by the Bureau of Labor Statistics, to have the most intense growth in this group of occupations marked by a high rate of retirement growth. Only 1%, 23%, 26.8% and 26.9% of openings in these occupations will be created by retirement, the rest by growth.

The occupations with the most openings in this group will be Registered Nurses, Elementary School Teachers, and Teacher's Aides — all occupations that require human contact with sometimes difficult clienteles.

Job growth, therefore, is a factor in the percentage of job openings that are due to retirement. The least growth is associated with those occupations where the replacement of retirees creates the most new jobs. The Baby Boomer generation's retirement will thus have varied effects depending on occupation.

In the next panel we look at the College Degree and Job Need disconnect. Are people getting degrees to qualify for occupations that won't need quite so many people?

Sources: Dohm, Arlene. "Gauging the labor force effects of retiring baby-boomers." Monthly Labor Review, July 2000. Daniel E. Hecker. "Occupational employment projections to 2010." Monthly Labor Review, November 2001.