How Did the Elimination of Mandatory Retirement Affect Faculty Retirement?

Abstract

We use information on retirement flows over the 1986-96 period for older faculty at a large sample of four year colleges and universities to measure the effect of the elimination of mandatory retirement. Comparisons of retirement rates before and after 1994, when most institutions were forced to stop mandatory retirement, suggest that the abolition of compulsory retirement led to a dramatic drop in retirement rates at ages 70 and 7 1. Comparisons of retirement rates in the early 1990s between schools that were still enforcing mandatory retirement, and those that were forced to stop by state laws, lead to the same conclusion. In the era of mandatory retirement, fewer than 10 percent of 70-year-old faculty were still teaching two years later. After the elimination of mandatory retirement this fraction has risen to 50 percent. Our findings suggest that most U.S. colleges and universities will experience a significant rise in the fraction of older faculty in the coming years.