The retirement wave

Managers and professionals, particularly those in education and health care, will lead the coming retirement wave, according to a new study. Although the crest of the baby boom will pass the typical retirement age in 20 years, some industries and occupations will be hit much sooner.

"The retirement wave," published today in the online edition of Perspectives on labour and income, looks at the retirement effects of an aging population among industries and occupational groups. The article uses data from the 1999 Workplace and Employee Survey.

During the next decade, thousands of aging baby boomers will be approaching retirement. While they will have a significant impact on the labour force, not all industries will be affected at the same time.

Education will likely be one of the first industries to feel the retirement crunch. The average age of the education workforce is high at 44.3 years; it is particularly high for managers, at 47.6. Education also has a low median retirement age - 56.4. Accordingly, about half the education workforce is likely to retire within 12 years, and half its managers within 9 years. In 1999, the retirement rate in education was already more than double the economy-wide average.

The health-care industry also has an older workforce, with an average age of 42.0 years in 1999, but its median retirement age of 61.8 is about five years later than in education. Thus, in health care, 20 years separates the median age of employees from the median retirement age.

Education and health care are particularly vulnerable because this sector also has a higher proportion of managers and professionals. Given the greater experience required of managers and the high level of education expected from professionals, both tend to be among the oldest employees. Managers and professionals in education and health care are about five years older than those in other industries with high educational requirements.

It appears that managerial occupations in general will be hardest hit by the baby-boomer retirement. The average age of managers was under 40 in only 2 of the 14 sectors surveyed. Fully 90% of managers had 10 years or more of experience in 1999, and 55% were 40 years or older.

Only marketing and sales positions and non-skilled production occupations appear to be relatively youthful in their age distributions. For example, 35% of marketing and sales employees had reached age 40 in 1999.

Education and health care are not alone in facing an aging workforce. Some 58% of forestry, mining, and oil and gas workers were 40 or older in 1999, as were 58% of men and 54% of women in communications and other utilities. The average age for both these industries was 41.1, comparable to health care. Utilities had a low median retirement age of 57.8 and stands out as being vulnerable to a retirement squeeze.

Retail trade and consumer services occupy the opposite end of the spectrum: 32% of men and 36% of women were less than 30 years old, with an average age of 36.1.

Note: The data are from the first year (1999) of the Workplace and Employee Survey. Three separate baby-boomer age groups were studied: 34 to 39, 40 to 45, and 46 to 52. The survey excludes a few small industries and one major one - public administration. Other sources indicate that public administration has an older demographic structure and may encounter replacement stress earlier than some other industries as the baby-boom generation retires.

The article "The retirement wave" is available in the February 2003 online edition of Perspectives on labour and income, Vol. 4, no. 2 (75-001-XIE, $5/$48).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Andrew MacKenzie (613-236-5868 ext. 243; mackenzie@ccsd.ca).