Retirement & Financial Planning Report

A recent study says that increased educational levels help explain the trend of persons staying in the workforce longer, although noting that other more commonly cited factors play a part as well.

The report did not focus specifically on the federal government, but federal employees overall are more educated than the general workforce and increasing numbers have extended their careers in recent years beyond their retirement eligibility points.

The Center for Retirement Research, focusing on employment of men, noted that since hitting a low point in 1993, the percentage of men in the workforce at ages 60-74 has risen steadily from 33 to 44 percent. It said the most commonly named reasons for this are the increase in the eligibility age to claim full Social Security benefits, and the overall shift from defined benefit retirement plans to defined contribution plans, which tend to encourage later retirements for those wanting more time to build up their accounts.

However, it noted that each generation of persons born in the 20th Century who are now at least age 60 overall had a higher level of educational attainment than the generation that preceded it. For example, in 1985 only 15 percent of men between 60 and 74 had a college degree, but that figure is now 32 percent among those in that age group. In contrast, the percentage lacking a high school diploma fell from 40 to 13 percent.

“More educated workers earn higher wages, have better employment opportunities and health, and typically hold less physically demanding jobs and jobs with better non-pecuniary rewards than workers who have less schooling. At older ages these factors can raise a worker’s ability and willingness to remain in the workforce. In fact, people with advanced school¬ing are much more likely to work past 65 than those who have less education,” the study says.

Although the report did not examine patterns among women in detail, it said the same increase in educational attainment applies to them as well.