In a paper recently published by the National Bureau of Economic Research, University of Texas at Austin economist Olivier Coibion and colleagues Yuriy Gorodnichenko of the University of California, Berkeley, and Michael Weber of the University of Chicago report a 7 percent drop between January and April in labor force participation (the measure of how many people either have jobs or are seeking them).
That decline was more than twice the cumulative drop in the eight years from 2008 to 2016, according to their figures.
Among Americans who aren't in the labor force, the researchers found what they call a “large” increase in those who identify themselves as retired, rising from 53 to 60 percent of the category of people who are not employed.
The researchers think this suggests a wave of retirements that were earlier than planned. “With the high sensitivity of seniors to the COVID-19 virus, this may reflect in part a decision to either leave employment earlier than planned due to higher risks of working or a choice to not look for new employment,” they wrote.
But it's not clear whether this is a permanent shift or whether older workers eventually will return to the workforce once the coronavirus pandemic subsides.
"It could be the case that retirees at some point realize their savings are not enough and they have to come back to work to make a living,” Weber says. “I would assume this only will happen once it is safe to work again, possibly after a vaccine is available."