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Pensions and Retirement Among College-Educated Women

Labor force participation rates among college-educated women grew in the first decade of the 21st Century. But not among the population one would expect: That result was among 60-to-64-year-olds. A recent study looks at that finding as well as how pensions help explain it.

In “Teaching, Teachers Pensions and Retirement Across Recent Cohorts of College Graduate Women,” National Bureau of Economic Research Working Paper 22698, Maria D. Fitzpatrick argues that one possible reason for this change stems from the fact that fewer college-educated women among the more recent groups of them were ever teachers.

What does this have to do with pensions? Fitzpatrick suggests that this trend “could affect the length of women’s careers because teaching is a profession where workers are covered by defined benefit pensions and, generally, defined benefit pensions allow workers to retire earlier than Social Security.”

“Teachers have different patterns of retirement and labor supply at older ages than their similarly educated and professionalized counterparts,” says Fitzpatrick. She argues that younger groups of teachers “are less likely to be employed and more likely to be retired between the ages of 60 and 64 than recent cohorts of similarly educated and professionalized women.”

This, Fitzpatrick says, is likely attributable to access to traditional DB plans — which teachers have, but women who are not teachers do not.

And this has a broader application than one occupation, Fitzpatrick argues, saying, “The difference in pension access across occupations is also likely a primary driver of changes in the patterns of labor supply among older college-educated women in recent decades.”

For instance, Fitzpatrick says, patterns of older teachers’ employment and retirement “did not change much for the cohorts between 1931 and 1950,” but “other older college-educated women who were never teachers saw significant increases in the propensity to be employed and decreases in the likelihood of being retired.” And, she notes, this finding corresponds to the patterns regarding DB plans in the private sector.

“The combination of increased educational attainment and changing occupational choice both played a role in the increases in the labor supply of older women,” says Fitzpatrick.