Atlanta Fed, Report: Retirement and Its Impact on Labor Supply

“The aging population is clearly a powerful influence on the labor force. A recent blog post  by my colleagues at the New York Fed argues that the aging population is behind almost all the shortfall in the overall labor force participation rate relative to pre-COVID. Importantly, an aging population is likely to continue to pressure the labor force in coming years. A January 2023 study  by the Congressional Budget Office projected that between 2023 and 2053 the number of people aged 65 and older will increase by 25 million (an average rate of 1.2 percent per year), whereas the prime working-age population (defined as those aged 25–54) will have increased by only eight million (an average rate of 0.2 percent per year). Moreover, immigration will increasingly drive projected prime-age population growth as US birth rates remain below the rate necessary for a generation to exactly replace itself.”