Skip to main content

Unemployed Older Workers: Many Face Long-Term Joblessness and Reduced Retirement Security

GAO-12-724T Published: May 15, 2012. Publicly Released: May 15, 2012.
Jump To:
Skip to Highlights


What GAO Found

Unemployment rates for workers of all ages have risen dramatically since the start of the recent recession in December 2007, and workers age 55 and over have faced particularly long periods of unemployment. The seasonally unadjusted unemployment rate for older workers increased from 3.1 percent in December 2007 to a high of 7.6 percent in February 2010, before it decreased to 6.0 percent in April 2012. As in prior recessions, smaller percentages of workers age 55 and over became unemployed in comparison with younger workers. Some researchers attribute older workers’ lower unemployment rates to the fact that older workers tend to have longer job tenure, and are consequently less likely to be laid off than younger workers.

Focus group participants told us that they believed employer reluctance to hire older workers was their primary reemployment challenge, and several cited job interview experiences that convinced them that age discrimination was limiting their ability to find a new job. Moreover, many experts, one-stop career center staff, and other workforce professionals we interviewed said that some employers are reluctant to hire older workers. Because of legal prohibitions against age discrimination, employers are unlikely to explicitly express a lack of interest in hiring older workers; however, one workforce professional told us that local employers had asked her to screen out all applicants over the age of 40.

Job loss can result in fewer years of work over a worker’s lifetime, which can lower the worker’s retirement income in several ways. For example, fewer years of work can prevent a worker who is covered by a traditional DB plan from having enough years of work with an employer to vest in (that is, earn a nonforfeitable right to receive) employer-funded retirement benefits. And even if a worker who is covered by a traditional DB plan has enough years of work to earn a right to the benefits, fewer years of work can reduce a worker’s final retirement benefit if the number of years worked is used in the formula for calculating retirement benefits. For workers with DC plans, having fewer years of work can limit the amount of yearly employee and employer contributions that accumulate in a worker’s account. Moreover, Social Security retirement benefits may be reduced as a result of fewer years of work because the benefits are based, in part, on a calculation of the worker’s average monthly earnings over 35 years. The 35 years used for the calculation are those with the worker’s highest earnings, adjusted for changes in wage levels. If a worker has less than 35 years of earnings, then zeros would be used for earnings in the missing years, and this will result in a lower calculated benefit.

At the same time, long-term unemployment can motivate older workers to file for early Social Security retirement benefits. Many unemployed older workers in our focus groups said that they were planning to claim Social Security retirement benefits as soon as they were eligible or had already done so because they needed a source of income to help pay for living expenses. Moreover, a 2012 study found that high unemployment increases Social Security retirement claims among men with limited education.

Why GAO Did This Study

This testimony discusses the status of unemployed older workers. The most recent recession, which began in 2007 and ended in 2009, was the worst since the Great Depression, and has been characterized by historically high levels of long-term unemployment. While it is crucial that the nation help people of all ages return to work, long-term unemployment has particularly serious implications for older workers (age 55 and over). Job loss for older workers threatens not only their immediate financial security, but also their ability to support themselves during retirement.

Today's testimony summarizes a report that we prepared for this committee and released today. This testimony focuses on (1) how the employment status of older workers age 55 and over has changed since the recession, (2) older workers’ challenges in finding new jobs, (3) how periods of long-term unemployment might affect older workers’ retirement income, and (4) what other policies might help unemployed older workers regain employment and what steps the Department of Labor (Labor) has taken to help unemployed older workers.

For more information, contact Charles Jeszeck (202) 512-7215 or

Full Report

GAO Contacts

Office of Public Affairs


WorkersOlder workersUnemploymentEconomic recessionRetirement benefitsLabor forceUnemployment ratesRetirement savingsIndividual retirement accountsRetirement income