ECONOMIC SECURITY IN AN AGING AMERICA: A REVIEW OF LABOR FORCE PARTICIPATION DYNAMICS, BARRIERS, AND INCENTIVES AMONG ADULTS AGED 55 AND OLDER

The U.S. labor market is grappling with population aging, which is increasingly making it more critical for adults over the age of 55 to maintain their employment to ensure individual financial security as well as national economic growth. The purpose of this review is to summarize the literature on the Labor Force Participation (LFP) trends, barriers, and incentives that influence older workers' employment options. The historical LFP of older adults fell throughout most of the twentieth century, began a steady increase in the 1990s, was interrupted by early retirements during COVID-19, and is now stagnant. But these patterns of aggregates obscure significant differences among males and females, different races, and varying levels of education. Structural obstacles, such as age-based hiring discrimination, poor health, lack of digital skills, caregiving duties, and benefit lock-in related to health insurance and pensions, limit older adults’ ability to continue work. Delayed Social Security benefits, phased retirement, and psychosocial rewards of meaningful work are examples of countervailing incentives that promote longer engagement, but are not equally available. The policy landscape remains heavily reliant on financial incentives and insufficiently attentive to structural barriers, which leaves the most vulnerable older workers behind. These findings align with life-course perspectives showing that disadvantages compound over time. Collaborative policies that combine health promotion, anti-discrimination enforcement, re-training and work flexibility will be necessary to ensure equitable and long-term employment in an aging workforce.