Category: Uncategorized

Key Takeaways

• In stark contrast to trends observed for homeowners under age 65, mortgage use among homeowners age 65-plus has risen steadily in recent years.
• Between 2000 and 2022, mortgage use by homeowners age 65-plus rose by 28.5 percent.
• The use of mortgages among older homeowners is rising almost everywhere, but the extent of this rise varies dramatically by state.
• It is imperative that policymakers and business leaders develop policies and practices that promote an equitable mortgage market that fosters affordable homeownership and economic security for every generation.

Contrary to their younger counterparts, American homeowners¹ over age 65 are increasingly using mortgages². This development is not bad in and of itself, but it does raise critical issues for policymakers and business leaders, particularly relating to the elevated rejection rates and higher borrowing costs that older adults face in the mortgage market. Understanding and addressing these challenges will be central to fostering a market that provides fair and equitable access to mortgages for people of every age.

Mortgage debt remains uncommon among homeowners age 65-plus relative to their younger counterparts; in fact, the fraction of homeowners age 65-plus who had a mortgage in 2022 (34 percent) was less than half that of homeowners under age 65 (70 percent)³. However, trends in mortgage use among older and younger homeowners have diverged for many years⁴. Between 2000 and 2022, mortgage use among homeowners age 65-plus rose by 28.5 percent while simultaneously falling for all younger age groups. This rise reached a peak in 2017, when mortgage use among 65-plus homeowners was 41.1 percent higher than its 2000 level. The COVID-19 pandemic drove a significant decline in mortgage use among 65-plus homeowners in 2020, but more recent data suggest that mortgage use among older homeowners is rising once again.

Between 2000 and 2022, mortgage use among 65-plus homeowners rose almost everywhere⁵, but the scale of this growth varied dramatically from state to state. Mortgage use among older homeowners grew by less than 10 percent in Florida, New Hampshire, and Alaska; meanwhile, five states (Wyoming, South Dakota, North Dakota, Iowa, and Idaho) saw increases of over 50 percent. The forces driving this variation are complex; however, there is clear evidence that growth in mortgage use among 65-plus homeowners was especially strong in certain regions of the country (e.g., the Midwest).

Rising mortgage use among older homeowners is not necessarily a bad development; for example, a mortgage can serve as a cost-effective tool for accessing home equity⁶. However, as older homeowners come to rely on mortgage products more, it is critical that this population is well-informed about their options, and that policies and practices in the mortgage market meet the needs of every generation. These necessities are underscored in a 2023 working paper by Natee Amornsiripanitch⁷, which finds that older adults face significantly higher application rejection rates and borrowing costs in the mortgage market. Age discrimination may partly explain these negative outcomes; however, several factors are likely to play a role⁸. Whatever the cause, these disparities can have serious economic consequences, including lower economic security among older homeowners who are unable to access wealth stored as home equity. 

AARP closely follows research examining housing issues important to older adults. In April 2023, AARP published an online article that covers Amornsiripanitch’s findings and highlights proactive steps that older adults and lenders can take to close mortgage deals with fair terms. One striking example covered in the article is that mortgage applications submitted by older adults are commonly denied because of an incorrectly calculated debt-to-income (DTI) ratio⁹. This can happen because loan officers are used to underwriting mortgages based on earned income, since this source represents the vast majority of income for a typical (i.e., younger) mortgage applicant. Given that older adults commonly receive a substantial fraction of their income via other sources (e.g., investment income, social security), a full accounting of these income streams is necessary for a lender to accurately assess the applicant’s ability to afford the mortgage¹⁰.

This article is just one example of AARP’s efforts to inform older consumers about their options with respect to mortgages; other recent articles examine reverse mortgages and the pros and cons of paying off a mortgage before retirement. In addition, AARP champions public policies and business practices that ensure equitable access to mortgages for people of every generation, strong consumer protections, and flexible loan servicing policies that allow homeowners to retain their homes during periods of financial stress. In an environment where older adults are increasingly turning to mortgages, efforts of this kind are central to creating an equitable mortgage market that fosters affordable homeownership and economic security for every generation.

1. ^{In the context of this article, a “homeowner” is defined as a householder who owns their home. In the U.S. Census and American Community Survey (ACS), a “householder” is the person (or one of the people) in whose name the household is owned or rented. In cases where the household is jointly held by more than one person (e.g., a married couple), the householder may be any member of that set. For more information, see the “Household Type and Relationship” section beginning on page 82 of the 2022 ACS/PRCS Subject Definitions.} ↩︎
2. _{For the purposes of this article, a homeowner is said to be “using” a mortgage if at least one form of debt is held against their physical household. This includes traditional mortgages, as well as other debt instruments such as reverse mortgages. The homeowner’s specific motivation for using a mortgage is not explicitly covered in the ACS; the typical purpose of a mortgage is to finance the purchase of a home; however, mortgages can be used for other purposes (e.g., someone who owns their home outright may use a mortgage to access home equity). A single property can have multiple mortgages.} ↩︎
3. _{According to 2022 American Community Survey (ACS) public-use microdata downloaded from IPUMS USA (www.usa.ipums.org).} ↩︎
4. _{Notably, mortgage use among 65-plus homeowners has been rising for a considerably longer period of time; in fact, Collins, Hembre, and Urban (2020) show that this trend extends back to at least 1980.} ↩︎
5.  _{Mortgage use among 65-plus homeowners fell slightly in Hawaii and the District of Columbia during 2000 – 2022.}
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6. _{Recent research suggests that low interest rates are one of several factors responsible for rising mortgage use among older homeowners. Collins, Hembre, and Urban (2020) discuss these factors and their potential role.} ↩︎
7. _{Dr. Amornsiripanitch is a senior financial economist at the Federal Reserve Bank of Philadelphia.} ↩︎
8. _{For example, age-related mortality risk makes it more costly (on average) for lenders to give mortgages to older homeowners, a fact that may contribute to higher rejection rates and borrowing costs for this population. A February 2023 article from the Center for Retirement Research at Boston College reviews Amornsiripanitch’s findings and potential explanations in detail.} ↩︎
9. _{This example is provided by Brian Rugg, Chief Credit Officer at LoanDepot.} ↩︎
10. _{If sizable income streams are excluded, an applicant’s debt will appear large relative to their income (i.e., a high DTI ratio). This may lead the lender to incorrectly conclude that the applicant cannot afford the mortgage.} ↩︎

Key Takeaways

• Maternal and paternal age at childbirth has risen rapidly for decades, with significant economic and social implications for every generation.
• In 2022, 51 percent of births were to mothers age 30-plus, up from just 17 percent in 1972. Similarly, 64.1 percent of 2022 births were to fathers age 30-plus, up from 31.8 percent in 1972.
• Parents age 50-plus with a child under age 25 in their household are significantly more likely to participate in the labor force relative to adults age 50-plus who do not have a child under age 25 in their household.
• As a rising fraction of people delay their childbearing years, public policies and business practices that combat age discrimination in the workforce will be critical to fostering economic security for every generation.

In addition to deciding whether to have children, choosing when to have them is a critical decision with enormous social and economic implications for parents, their children, and society at large. Over the last 50 years, the distribution of maternal and paternal age at childbirth has evolved from one dominated by people in their teens and twenties to a new normal in which older parents account for an increasingly large fraction of births. This sea change has profound implications for critical economic decisions later in life, including labor supply decisions. The economic success and security of American families depends on recognizing this shift and developing public policies and business practices that meet the needs of all American families.

For many, the concept of “childbearing years” stems from the experience of past generations. In 1972, mothers under age 24 accounted for nearly half (47.9 percent) of all births, whereas mothers age 30-plus were responsible for just 17 percent. Paternal age at childbirth skewed low as well, with fathers age 30-plus yielding fewer than one-third of all births. Children born to parents over age 35 were especially rare, with just 4.3 and 11.7 percent of 1972 births being to mothers and fathers in this age group, respectively. Because their parents had them so early in life, most children born in 1972 reached adulthood before either of their parents turned 50.

Although many still view childbearing as a young person’s pursuit, maternal and paternal ages at childbirth have shifted dramatically over the last 50 years. Mothers under age 24 accounted for just 17 percent of births in 2022, whereas mothers age 30-plus were responsible for over half (51 percent). Similarly, fathers age 30-plus accounted for nearly two-thirds (64.1 percent) of births. One major reason for this shift is the increased representation of mothers and fathers over age 35, who were responsible for 15.8 percent and 28.4 percent of 2022 births, respectively. As a result, a significant fraction of children born in 2022 will still be minors when one or both of their parents turn 50. 

Such a dramatic shift in parental age at childbirth has fundamental social and economic implications for parents, their children, and society at large. These ramifications are many and varied; however, one particularly consequential example is that delayed childbearing profoundly affects labor supply decisions later in life. In 2022, females age 50-plus were more likely to participate in the labor force if at least one of their own children under age 25 lived with them, and this disparity rose sharply with age. For those age 65-plus, the labor force participation rate (LFPR) of females with at least one child under age 25 at home (37.2 percent) was more than double that of females without a child under age 25 at home (15.2 percent). The same effect was even more pronounced for males; in fact, males ages 50-54, 55-59, 60-64, and 65-plus with a child under age 25 at home were 12.2, 12.2, 14.4, and 24.8 percentage points more likely to participate in the labor force relative to their counterparts without children under age 25 at home (respectively).¹

Although delayed childbearing is associated with economic forces that have generated tremendous benefits for parents and their children, ² parenting later in life does present challenges, especially given that older parents with dependent children are more likely to be in the labor force. This is because older adults who wish to work longer, re-enter the labor force, or reskill/upskill, are often hampered by implicit and explicit age discrimination in employment policies and practices. In addition, support for working caregivers remains insufficient, which can be especially damaging to older workers who are simultaneously caring for adult and minor family members.

As an advocate for older workers in general, AARP has produced insights, tools, and resources that promise to empower working parents as they age. This includes recent research on the economic cost of age discrimination in employment, the economic benefits of supporting working caregivers, and inequality in access to employer-sponsored retirement savings plans. Practical tools include a range of retirement calculators and planning tools, a job board and resume advisor designed to meet the need of older job seekers, and the AARP Skills Builder for Work^SM, which helps older workers gain in-demand skills and remain competitive in the labor market. As America’s parents age, initiatives such as these represent critical investments which will promote economic security and success for every generation.

1. _{Although not discussed in this article, we find that this effect (i.e., that 50-plus males and females with children under age 25 in their household are more likely to participate in the labor force) remains large and statistically significant when controlling for age, metropolitan status, race and ethnicity, marital status, and educational attainment.} ↩︎
2. _{Bailey (2006) shows that access to contraception (which facilitates delayed childbearing) has promoted greater labor force participation among women. Similarly, Bratti (2023) finds that delayed childbearing improves women’s labor market outcomes. In addition, Bailey (2013) finds that the same family planning resources promote greater economic success for children when they reach adulthood.} ↩︎

Key Takeaways

• Labor force participation among people with disabilities has significantly increased since the start of the pandemic.
• In October 2023, the average labor force participation rates for people with disabilities ages 16-64 and 65-plus stood at 118.4 percent and 105.3 percent (respectively) of their February 2020 values.
• The expansion of remote work opportunities, which facilitate employment for people with disabilities who face barriers to working away from home, is at least partially responsible for these trends.
• These findings highlight a pressing need to proactively challenge our assumptions about the nature of work and develop labor policies and employment practices that meet the needs of all workers, regardless of age or ability.

Falling labor force participation – particularly among older adults – has fueled headlines in countless news stories since the start of the COVID-19 pandemic in March 2020. However, a closer look at the data reveals a more complicated story, including rapidly rising labor force participation among people with disabilities, regardless of age. Recognizing this trend and understanding its implications for the future of work is critical to developing labor policies and employment practices that increase labor market access and maximize opportunity for people of every generation.

To understand how COVID-19 has affected the American civilian labor market,¹ it is useful to examine the 12-month labor force participation rate (LFPR) for any group as a percentage of its value in February 2020 (i.e., immediately before the pandemic).² Among people ages 16-64 without a disability,³ monthly labor force participation declined dramatically in Spring 2020 but recovered quickly thereafter;⁴ as a result, the 12-month LFPR of this group never fell below 97.7 percent of its February 2020 value and returned to pre-pandemic levels by the middle of 2023.⁵ Conversely, the decline in average labor force participation among adults age 65-plus without a disability has been sharp and sustained, so that the 12-month LFPR of this population in October 2023 was just 93.8 percent of its pre-pandemic value. This decline represents hundreds of thousands of lost labor force participants and has significantly contributed to an ongoing labor shortage in the United States.

Average labor force participation among people with disabilities evolved very differently over the same period. Since the COVID-19 pandemic began, the 12-month LFPR for people with disabilities ages 16-64 never fell below 98.9 percent of its February 2020 level. Instead, it has risen rapidly since the middle of 2021 and reached 118.4 percent of its February 2020 value by October 2023. The 12-month LFPR for people with disabilities age 65-plus did decline significantly during the first 18 months of the pandemic, falling as low as 89.2 percent of its February 2020 value in August 2021. However, it has experienced a strong resurgence since then and stood at 105.3 percent of its February 2020 level as of October 2023.

These findings strongly suggest that the pandemic played a role in promoting labor force participation among people with disabilities, regardless of age. The 12-month LFPRs for people with disabilities ages 16-64 and 65-plus in October 2023 (40.2 percent and 8.6 percent, respectively) are at or near historic highs,⁶ and current trends indicate that both rates will continue to rise over time. Although several factors may be responsible for this increase in labor force participation, two key drivers are the sudden abundance of opportunities for remote work and widespread access to the technological innovations that make remote work possible (e.g., video conferencing services that offer features such as closed captioning for conference calls).⁷ 

There is an important lesson in these findings: Costly barriers to employment may stem from entrenched attitudes about the nature of work. Remote work existed before the pandemic but was viewed as a niche arrangement for a handful of specific skill sets. When remote work became unavoidable due to lockdown measures and social distancing, policymakers and employers quickly realized that a broad segment of the workforce could function productively from home, even after the pandemic subsided. This shift in perception has expanded employment opportunities for millions of people with disabilities and benefited thousands of employers facing a historic labor shortage. 

The analysis above highlights the value of proactively challenging assumptions about the nature of work, including labor policies and employment practices that implicitly or explicitly promote ableism and prevent people with disabilities from working.⁸ Given that older adults are far more likely to have a disability relative to the general population, AARP has pioneered innovative solutions in this area for many years. One example is AARP’s Senior Community Service Employment Program, which helps low-income, unemployed individuals age 55-plus find work. Relatedly, the AARP Job Board includes features that help job seekers with disabilities identify compatible employment opportunities, and AARP Skills Builder for Work^SM provides resources for developing skills that are competitive in the job market and aligned with one’s specific needs. Finally, AARP Foundation’s legal advocacy work often targets ADA violations and other barriers that impact workers who have a disability. Efforts such as these improve labor market conditions for workers with a disability and employers, producing economic gains benefiting every generation.

1.  _{Due to the design of the Current Population Survey (CPS), all analysis in this article focuses on the civilian noninstitutional population, which excludes military servicemembers and individuals in institutions (e.g., prison inmates)}. ↩︎
2. _{We define the 12-month LFPR of a specified group in any given month to be an unweighted average of monthly labor force participation rates for that group in the most recent 12-month period. For example, the 12-month LFPR for people ages 65-plus in October 2023 is calculated as the unweighted mean of monthly labor force participation rates for the 65-plus population from November 2022 through October 2023. For each group under study, Figure 1 reports the 12-month LFPR at each point in time as a percentage of its value in February 2020. Values above 100 indicate that the 12-month LFPR has risen relative to its February 2020 value, whereas values below 100 indicate that the 12-month LFPR has fallen relative to its February 2020 value. Because our metric focuses on average labor force participation over an entire year, changes in its value are only mildly affected by short-run shocks and do not reflect seasonal variation in labor force participation. Instead, this measure focuses on longer-run shifts in labor supply by each group studied.} ↩︎
3. _{Since June 2008, the CPS has tracked disability status with a series of six questions aimed at identifying CPS household members with physical, mental, and/or emotional conditions impacting hearing, vision, cognition (e.g., concentration, memory, decision making), walking/climbing stairs, performing activities outside of the home, or independently completing personal care activities such as bathing. A household member with at least one such condition is counted as having a disability. Additional details are available here.} ↩︎
4.  _{Because the 12-month LFPR metric is an average of 12 monthly LFPRs, large month-to-month changes will have a limited effect on the 12-month LFPR if those changes are offset in later months. For example, labor force participation among those without disabilities ages 16-64 fell sharply between February and May 2020 but recovered much of that loss over the next few months.} ↩︎
5. _{The 12-month LFPR for people ages 16-64 without a disability fell from 77.6 percent in February 2020 to a low of 75.8 percent in March 2021. It is important to emphasize that – even though this decline is only about two percentage points – it translates to a decline in average labor force size of several million people for this group.} ↩︎
6.  _{Public-use microdata from the Current Population Survey (CPS) identifies people with disabilities dating back to June 2008; as such, 12-month LFPRs for people with and without disabilities can be calculated back to May 2009.} ↩︎
7. _{A recent SHRM article provides more details on this subject.} ↩︎
8. _{For example, overly inflexible return-to-office (RTO) policies threaten to eliminate productive remote employment opportunities that benefit workers with disabilities and their employers. Risks associated with such RTO policies are examined in a recent Allwork article. Similarly, a recent SHRM article discusses the need for thoughtful RTO policies which allow for hybrid and remote work options that are mutually beneficial to employers and their workers.} ↩︎