Economics of Retirement Change : New Patterns Emerge for the 'Third Quarter of Life'

Times Staff Writer

Scholars are calling it "the third quarter of life"--the period between ages 50 and 75--and its implications for American society are varied and paradoxical:

--As the proportion of older people increases, middle age is regarded as being much later in life.

--Yet people tend to choose early retirement, even though they are living longer and more vigorously.

--The number of people available to support the older population is lessening.

These changes in the way Americans are living occasioned a panel on "Revising National Retirement Policy: What Economic Roles for Older Adults?" here recently in conjunction with the American Assn. for the Advancement of Science 151st national meeting.

Robert Morris of the University of Massachusetts at Boston, who arranged the program, set the tone by saying: "We are here to share the conviction that this subject is just beginning to surface in its aspects of modifying the American economy and society. Our approach to the subject is to confront a number of conflicting trends."

Those include the increase in the proportion of older people, the change in life span through which people behave as middle-aged much later in life than previously and the economic costs of retirement.

Panelist Lydia Bronte of the Carnegie Corp.'s Aging Society Project said life expectancy has lengthened by more than 25 years in this century "and is steadily rising," perhaps to a life expectancy of nearly 100 years by the early 21st Century.

"Another and unexpected phenomenon is that we are staying more physically vigorous and active," Bronte said. "We are seeing the continuation of the adult prime into decades that were not part of it in the past. . . . This is a society in which 65 is no longer a watershed point.

"We redefine the period between 50 and 75 as the third quarter of life. In the first quarter we are born, grow up and are educated. In the second we join the work force, have a family and become established in the community. Then at 50 our kids grow up and leave, we reach the maximum point in job or career and we stay on at the same plateau or retire early."

The patterns of increasing activity after 50 are the same for men and women, Bronte said, and that "contradicts the conventional concept of retirement," which previously only applied to men inasmuch as women were regarded as homemakers for the major portion of their lives.

Further, she said, people in their early or mid-60s not only are encouraged to retire from their jobs but also from active participation in the community.

"The paradox," Bronte said, "is that at a time when an adult is staying longer in the prime of life, people are being pushed out earlier and earlier."

The options, she said, are full-time employment, part-time employment, full-time and part-time volunteer work and returning to education, a situation that has led to what she termed "an underground and undocumented revolution."

"The business executive asked to retire early may regard himself as a failure," she said. "He fades into an old man with a senior citizen's card. Or he is someone 55, with 15 or 20 years more of active productivity that really is a period of active growth--a priceless resource for society as a whole."

Bronte said that while there is a pressing need for assistance in changing careers, "there are no career counselors in this age group--only three I know of in the country." She spoke of the need to look at the economics of retirement in America.

"When the Baby Boom people hit their third quarter in 1996, a third of the population will be between 50 and 75," she said. "It is questionable whether the existing working population can support that group.

"We need to know what kinds of changes people are making and what prevents them from doing so if they'd like to. We need to know the differences between white-collar workers and blue-collar workers . . . between women and men. We have found that people in professions such as medicine, law and the arts tend to keep growing."

Causes of Labor Problems

Panelist Steven Sandell of the National Commission for Employment Policy said that the chief causes of labor market problems are not age or age discrimination but "low levels of training, loss of jobs and sex discrimination." He expressed concern about older workers in general and an employment policy that does not deal with social problems.

"The problem is not with a woman of 85 who has no desire to work or a 65-year-old man who is disabled" Sandell said. "The problem is with the average Joes facing an unanticipated event: the loss of a job or illness."

Research indicates that government training programs work as well for older workers as they do for younger workers, especially when the programs benefit both business and the worker, he said. Older blacks and Latinos are two to four times more likely to have problems in the labor market "but they reflect lifetime labor market problems" for those groups.

He cited two government programs, the Job Training Partnership Act (a successor to CETA) and the senior community service programs of the Older Americans Act.

"Only about 1% of older persons eligible have participated in these programs," Sandell said.

"In the private sector there are relatively few innovative employment programs and practices that affect only a few of the company's older white-collar workers, and very few to keep blue-collar workers employed."

Morris read an abridged paper from Malcolm H. Morrison of the University of Pennsylvania, who was unable to attend. Morrison concluded that it is advantageous to society to employ older people "because unemployment of a larger part of the population means loss of productivity and manpower." Yet it is unlikely that this will change because "the incentives to retire and to retire early are so much greater than to keep working."

21st-Century Problem

Thus, he said, the major policy problem in the 21st Century will be how to shift incentives to retire later, a problem "for private industry and labor unions as well as government."

David Peterson of USC's Andrus Gerontology Center discussed "Capacities of Adults Over Age 60," a topic in which interest has increased rapidly because of the demographics on the aging of the population and the costs of pension plans. He spoke of industry's increasing early retirement incentives, such as those recently at DuPont and Arco.

"Retirement is seen as a way to get inefficient employees out of the work force," Peterson said. "It seems to me to result in wasted potential and economic loss."

He listed "stereotypes and myths" about older workers: poor health, loss of energy and increase of illness, absenteeism, lack of stamina, higher accident rate, increased insurance and medical costs, danger to themselves and other workers, lowered productivity, slowness, rigidity and rejection of innovation and a general belief that age reduces the value of retraining.

Individual Differences

"In the population over 65--26 million or 27 million--there are individual differences," he said. "Healthy, intelligent, creative--some people are, some are not."

The realities, Peterson said, are that stamina and resistance do decline with age and that chronic illness is more likely but acute illness is less likely than in younger workers. Older people adapt to chronic problems, such as loss of vision or hearing, and "80% of the population over 65 has little or no restriction on activity."

Muscle strength and reactions diminish, Peterson said, "but these seldom interfere with day-to-day ability, and the accidents and age myth is inaccurate--younger workers have more accidents."

"The only thing you can say about all older people is that you can't say anything about all older people," Peterson said.

Panelist Scott A. Bass of the University of Massachusetts at Boston discussed "Education for New, Productive Roles for the Elderly," speaking primarily of the role of higher education in such programs.

Non-Credit Classes

These include tuition-waiver programs within a regular college or university setting ("the numbers of these are very small"); continuing education, mostly non-credit classes targeted at leisure time or personal enrichment, and institutes for retired professional people.

Bass told of a program at the University of Massachusetts at Boston that began when the Catholic Archdiocese of Boston approached the university for gerontological training for older people to work with other older people. The program included internships that gave the older students firsthand experience.

"Through this the older worker benefits, the community benefits and the university benefits," Bass said. "The university can play a pivotal role in new career options for older people."

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