The COVID-19 pandemic caused significant nationwide economic disruptions, but a study by the Government Accountability Office has found that older workers’ personal finances (such as retirement account balances) remained relatively steady during that time, and their employment outcomes returned to pre-pandemic levels after an initial spike in unemployment.
The GAO examined retirement account balances and total assets held by older households using Survey of Consumer Finances data, and it analyzed claims for retirement benefits using Social Security Administration administrative data. It found that during the pandemic, the prevalence of households aged 55 years or older that had retirement accounts, and the value of those accounts, held relatively steady between 2019 and 2022. Differences, however, persisted in the value of assets held by income quartile as well as by some demographic groups, including differences by education, race and gender.
The rate of Social Security retirement benefit claims by workers who were near the full retirement age decreased during the first three months of the pandemic. In late 2020, the rate of benefit-claiming for those near full retirement age increased, eventually exceeding pre-pandemic levels, according to the GAO’s analysis.
The GAO used Current Population Survey monthly data from 2017 to 2023 to analyze labor force participation rates and employment trends for older and younger workers.
The unemployment rate for workers aged 55 to 64 years peaked at 12.6% in April 2020. It had returned to the pre-pandemic level of 2.2% by April 2023. The number of workers at or near full retirement age claiming Social Security benefits initially dropped but then rose above pre-pandemic levels in late 2020.
Older workers were more likely to report that they were unemployed because they had lost their job or been laid off, and they were also more likely to have exited the labor force by retiring. Younger workers (aged 25 to 54) were more likely to report that they were unemployed because a temporary job had ended or because they left a job. The GAO found that existing differences by demographic group generally persisted, such as more highly educated older workers having higher labor force participation.
The GAO also sent a written questionnaire to 32 experts, asking them to identify policies likely to help discouraged or unemployed older workers.
The 25 experts who responded to the GAO’s written questionnaire generally favored policy options that could most effectively boost older workers’ employability. Among the options favored by 12 or more experts was a policy option suggesting that the Department of Labor identify and report on the legal, regulatory, logistical or other barriers to the employment of older workers. The experts also favored a policy option that the Labor Department offer targeted support, such as improving the agency’s existing job-search assistance programs, for older job-seekers.
