Association for Public Policy Analysis & Management

Panel: Occupational Demands Among Older Workers and Individuals with Disability

(Employment and Training Programs)

Work, retirement, and disability insurance application decisions depend partly on job attributes. Positions that require heavy lifting, crouching, or stooping; standing for long periods; or other types of physically exhausting work are generally ill-suited for older workers or individuals with disabling health conditions. Cognitively-demanding work may be better suited for older people than physically-demanding work, but probably not for those with limited education or those with mental health problem. While the existing literature relates economic and demographic characteristics, health conditions, and financial incentives in explaining employment or disability insurance application decisions, less is known about the extent to which employment prospects or disability application decisions reflect job demands and the changes in these demands over time. One possible explanation for the low employment rate among older worker and constant growth in SSDI rolls is job mismatch: older workers or potential workers with impairments are less likely to satisfy the demands of many jobs, which limits the set of jobs available to the individual and makes retirement or disability application more attractive. The papers comprising this proposed panel all use the detailed occupational characteristics from the Occupational Information Network (O*NET) linked to public use data, to explore how occupational demands impact employment, retirement, and disability insurance application decisions and identify policy implications. The first paper in this proposed panel uses the job characteristics from O*NET linked to the 1994-2012 Current Population Survey (CPS) from 1994-2012 to examine the differences across occupations in the prevalence of hiring older versus younger workers. The findings show that only a small number of occupations hire a disproportionate share of older workers, and the degree of occupational segregation decreases with education and increases with age. Thus, older, less-educated workers face more substantial barriers to employment. The second paper uses data from the Health and Retirement Study (HRS), including restricted-access occupational codes matched with job demands information derived from the O*NET, to examine what factors account for the educational differences in old-age employment. The results show that almost a half of the employment gap can be accounted for by differences in self-reported health and work-restricting health conditions. By contrast, the impact of O*NET job demands is relatively small. The third paper also uses the HRS and O*NET to develop a “Susceptibility Index” to identify occupations that are especially vulnerable to ability decline prior to the Full Retirement Age. The study uses this Index to explore whether workers in occupations that value abilities that decline early will be forced to retire earlier. The fourth and final paper uses detailed occupational characteristics from the O*NET linked to the occupations for individual workers in the March CPS to investigate the extent to which changing job demands have contributed to the growth in the SSDI rolls above and beyond growth caused by changes in the demographics of the labor force. The findings of these papers aid in understanding the extent to which government policies aimed at increasing employment among older workers or disabled will need to focus on job demands.