America needs to rethink "retirement"

Yesterday’s way of thinking about aging must be replaced with something that makes sense for the 21st century. The U.S. can begin by pursuing three reforms.

First, we can change the culture by changing how we measure, and the measure of “unemployment” must better account for older adults. The Bureau of Labor Statistics should update its benchmarks for analyzing the job market. People in their 60s or 70s should be considered eligible for work—but the “unemployment rate” tells us only about conditions for those actively working or seeking work.

How about adding the “employment ratio”—the percentage of men and women 20 years of age and older holding jobs—to the key monthly labor-market indicators? Perhaps also the employment ratio for Americans over 55? That number would tell us that the “work rate” for older Americans has been rising for 20 years, a rare heartening fact about the U.S. workforce these days.

Second, we need policy changes, starting perhaps with a tax credit for firms that invest in training and education for older workers, encouraging what the Japanese are starting to call “silver entrepreneurs.” The Kauffman Foundation estimates that nearly half of all entrepreneurs in the U.S. are over 45. Since they are also among the most successful and productive, this is good policy as well as great business.