ABSTRACT
This chapter focuses on policy discussions about older workers from issues of the adverse income effects of pensions and taxes towards the positive contribution of the substitution effects of high wages and attractive employment opportunities. However, older workers with labour market disadvantages have experienced a decline in real wages and the overall pattern for older men has been of stagnant real weekly earnings. The impact of the growing population of older workers on the size and age structure of the nation's civilian labour force in the coming decade will depend critically on the labour force participation behaviour of older men and women. Even though the Massachusetts economy has reached the level of full employment and is experiencing labour scarcities, employment projections show that further job growth of over 1.1 percent a year could be achieved if there were no labour supply constraints. Labour scarcities and skill mismatches could cost the United States a substantial amount of future economic growth.
