In 1966 you were selected as a member of a panel of 5,000 young men 14-24 years of age to be surveyed about work experience over a five-year period so that more could be learned about the work patterns of this part of the Nation's population. The U.S. Department of Labor is using the information from this survey to help plan future manpower programs.
The 5,000 men selected for this survey actually represent more than 16,000,000 men, that is, all young men 14-24 years of age in the U.S. civilian population. Cooperation from each of the 5,000 men is important. Only through your cooperation can the U.S. Department of Labor learn about the employment problems of this group.
The school enrollment status of young men affects their labor force situation. About three out of five young men in this age group were enrolled in school at the time of the first survey; forty-five percent of the students were employed, whereas, 92% of those out of school were working.
About 90 percent of the nonstudents employed in 1966 reported that they liked their jobs. However, despite this high level of satisfaction, 30 percent of these men said they would accept a similar job with another employer in the same area for a pay increase of less than 10 percent.
Thirty-eight percent of the employed nonstudents changed jobs between October 1966 and October 1967. Twenty-nine percent of those who were working at white collar jobs in 1966 changed employers, while 42 percent of the blue collar workers did so. Seven out of ten of the job changers reported that they liked their new job better than the old one.
Of the young men enrolled in high school in October 1966, over 90 percent said they enjoyed school. Most of these students mentioned that they liked mathematics more than any other subject and that their favorite extracurricular activity was sports.
About six percent of the young men enrolled in high school in 1966 dropped out without graduating during the following year. During the same period over half of those enrolled in the twelfth grade in 1966 went on to college.
Herbert S. Parnes is professor of economics and professor and chairperson of the Academic Faculty of Labor and Human Resources at Ohio State University.
The author of numerous books and articles examining the causes of success in the labor market, he has served on the advisory councils of the National Science Foundation and the Ohio Bureau of Employment Services and is a frequent consultant to federal and international agencies.
His latest book is Work and Retirement - A Longitudinal Study of Men, to be published in 1981 by the MIT Press. In 1965, Dr. Parnes was invited by the U.S. Department of Labor to investigate the causes of the declining labor force participation of older men. From this study grew the National Longitudinal Surveys (NLS) of Labor Force Experience, which are widely recognized as a major data source for research in labor economics. He has guided the NLS since their inception.
Dr. Parnes will retire in August as professor emeritus after 33 years at Ohio State and take a new position as professor of industrial relations and human resources at Rutgers University.
By Herbert S. Parnes
The following general observations and policy recommendations are based on data from the National Longitudinal Surveys (NLSJ, covering 10 years of labor force experience of a sample of 5,000 men who were age 45-59 in 1966.
The interviews were designed and analyzed at the Ohio State University Center for Human Research under a contract from the Employment and Training Administration for the U.S. Department of Labor.
The sample, selected to represent the entire United States male civilian population in this age range, is representative of the middle-aged and older male in the workforce today.
Contrary to popular impression, only a small minority of men are forced out of jobs by mandatory retirement plans, and most men are very happy in retirement.
Of those who were in jobs covered by mandatory retirement plans, and who had attained age 65 by 1976, 39 percent had chosen to retire prior to the mandatory age, with no regrets.
Only 15 percent of this group, and 5 percent of all recent retirees aged 65-69, left their jobs unwillingly because of a mandatory plan.
Poor health forces out eight times as many men as does mandatory retirement. By 1976, two-fifths of all the white men in the sample and almost half of the black men reported problems that affected the amount and kind of work they could do.
Among those 65-69 years of age, one-half of the whites and two-thirds of the blacks reported such problems. About 39 percent of recent retirees aged 65-69 left their jobs due to health problems.
In addition to forcing men into early retirement, health problems have other serious consequences for the welfare of middle-aged men and their families.
The unhealthy worker's family suffers, especially in cases where a long illness is followed by death before the worker reaches retirement age.
Such workers tend to be concentrated among those who also have lower earnings in the first place, and their lost earnings are generally not replaced by increased work activity of their wives.
Shortly after the husband's death, widows begin to enter the labor force, but the likelihood of their having earnings comparable to their husbands’ is very small.
Among white widows, 29 percent live below the poverty level, compared to 19 percent prior to the death of the husband. Among blacks, 47 percent live in poverty before the death of the husband, and 67 percent after.
Because the men who die before retirement age are more likely to be in lower status occupations with lower earnings, their wives already have suffered economic disadvantage relative to other married women before they are widowed.
Moreover, they are less likely than other women to have the education and skills needed to compensate, economically, for their loss.
Most men who retire for reasons other than poor health are, according to the survey, "very happy" in retirement and would, if they had it to do over again, retire at the same age.
A minority, however, recognize that they made a mistake in opting for retirement - about 13 percent of whites and 17 percent of blacks said they would choose to retire later if they could choose again.
Three-fifths of white retirees reported that their pre-retirement expectations were fulfilled. The remainder were almost equally divided between those who were disappointed and those who found their retirement experience better than they had anticipated.
Among blacks, the picture is less sanguine in that a considerably larger minority (31 percent) were disappointed in retirement.
Among middle-aged men who have not retired, most enjoy a relatively favorable position in the labor force. The overwhelming majority of employed men express satisfaction with their jobs, and about half report that they like their jobs "very much."
Unemployment rates for men in their late 40s and 50s are relatively low. In 1976, the unemployment rate for men 45- 54 was 4 percent, less than half the 8.2 percent rate for men aged 20-34. On average, the earnings of men in this age range are relatively high and continue to rise even as the men reach their early 60s.
There are two disadvantaged groups among this overall good picture, however.
Even when education, training, ability, work experience and other factors associated with labor market success are controlled for, there is still evidence that black men suffer lower earnings than their white counterparts.
The relative opportunities of black men aged 45-59 in 1966 did improve significantly over the decade 1966-76; controlling for education and other factors affecting productivity, the black-white hourly earnings ratio increased from 0.84 to 0.94.
But the improvement was still not enough to overcome race-related earning differentials.
Suffering involuntary job loss - being fired or permanently laid off - is not common during middle age or beyond. But as many as one in 12 men who have built up substantial equities in their jobs do lose them in mid-life, and rarely do they regain equally good jobs.
From 1966-76, involuntary job loss was a problem for 8 percent of wage and salary workers who had been with the same employer for five years or more, and most had served for at least 20 years when they lost their jobs. One-fifth of this group were subsequently unemployed for at least half a year.
Deterioration in earnings and occupational status was the most serious long-term consequence of job loss, but psychological costs also were observed.
Compared to members of a control group, displaced workers were less satisfied with the new job, less happy with life in general, and were more likely to have developed a sense of alienation.
These consequences suggest that consideration might be given to requiring "early warnings" of impending permanent layoffs and possibly the payment of some kind of "reparations" to workers to compensate them for the long-term earnings losses they will incur as a result of job loss late in life.
Because very few men leave the work force unwillingly due to either mandatory retirement plans or involuntary job loss, other possibilities should be considered in evaluating ways to reduce the Social Security rolls.
In the long run, programs leading to health improvement would make the most significant impact, because poor health accounts for more than eight times as many retirements as mandatory retirement plans.
Improvement of the health of the labor force will significantly reduce labor market disadvantage and public dependency.
Long-term policies to improve the health of the labor force should be encouraged not only on humanitarian grounds, but also because bad health deprives the economy of otherwise willing human resources.
The principal causes of illness and death among middle-aged and older persons are related in major degree to the character of the individual's lifestyle.
Increased research on effective methods for influencing the health-related behaviors of individuals early in life would appear to have potentially high payoffs - for a longer, healthier life for the worker as well as providing benefits to the economy as a whole.
Other changes in Social Security rules might be considered to lighten the load on the system.
The survey shows that early retirements increase with expected retirement benefits, from 30 percent of those who would be entitled to no benefits if they retire early up to 69 percent of those whose monthly benefit would be $600 or more.
In the early 1960s, retirement under Social Security at age 62 was made an option for men as it had been for women, and private pension plans which allow for early retirement rose from 77 percent to 87 percent in 1969.
Also, while a larger proportion of blacks than whites seems to leave the labor force due to disability, this difference disappears when controls are introduced for earnings as a worker compared to income from disability benefits.
Consideration might be given to increasing the normal retirement age for Social Security benefits, at the same time that the less healthy and less productive younger workers are financially accommodated through an alternative system so that they can leave the labor market.
Also, affirmative action policies should be vigorously enforced.
The lower earnings of black workers compared to whites has already been documented. It should be noted that there was a close correspondence between the improvement in both earnings and employment of blacks and the amount of government expenditures on anti-discrimination programs.
As the black-white difference in earnings disappears, so do the differences in becoming an early addition to government disability payment rolls.
Job sharing and flexible working hours, along with programs that facilitate occupational change in mid-life, would all also enable workers to move into less demanding jobs to accommodate health problems which might have forced retirement problem from the worker's existing job.
Such liberalizations might also be more rewarding in terms of worker job satisfaction in the middle and later years. It would probably encourage older workers to stay in the labor force even past the usual retirement age.
Such policies also would offer more options for those who are unhappy in retirement to re-enter the workforce.
Pre-retirement counseling programs would enable potential retirees to make more rational assessments of the benefits and costs of retirement so that their decisions are made on the basis of information and understanding.
Policies also should be directed toward making the retirement decision as reversible as possible for those who still decide they made the wrong choice.
Training and counseling throughout the life cycle should be directed at maximizing both the individual's knowledge of the range of job choices and his labor market flexibility.
Research based on the NLS sample of younger men shows that those who know most about the labor market are the most likely to have success in it Dependence on only one occupation may discourage skill development and exploration of job alternatives. Workers whose skills and/or self-concepts limit them to a single occupation suffer more than others if disability strikes or if their job disappears.
Counseling and training programs should emphasize flexibility. Individuals who can readily change occupations will have an easier time in the labor market.
Training programs for widows of low-status workers who have died during their prime working years could help these women to live above the poverty line.
The alternative is to alter the eligibility requirements of relevant transfer payment programs or to increase the payment level to bring them out of poverty.
From a social perspective, training and counseling programs for all ages throughout the life cycle would reduce public dependency, reduce the Social Security rolls and increase the overall adaptability of the U.S. labor force.