The Census Bureau’s Business Dynamics Statistics of Human Capital (BDS-HC) tables classify firms based on their share of workers over age 55. By matching administrative tax records of workers to tax records of firms, we can calculate the share of a firm’s workforce that falls into this older age category.

We sorted firms with similar shares of older workers into six groups: Firms with 10% or fewer older workers; 10% to 25%; 25% to 50%; 50% to 75%; 75% to 90%; more than 90%.

A 100-person firm in the “10% or fewer” group would have at most 10 workers over age 55. A 100-person firm in the “more than 90%” group would have at least 90 older workers.

The distribution of older workers across firms has shifted over time.

In 2006, 45 million workers were employed by firms with less than 10% older workers. But as the workforce aged, this number fell to around 32 million in 2022.

At the same time, employment at firms with at least 25% of older workers rose from 13 million to 35 million.

The aging of firm workforces has been particularly rapid in a few sectors.

The Utilities sector experienced the most dramatic transformation in the past two decades. Eighty percent of all employment in that sector is now at firms with at least a quarter of their workers over age 55. In comparison, in 2006, only 35% of employment was at firms with similarly high shares of older workers.

Aside from Utilities, Manufacturing and Wholesale Trade also experienced substantial increases in the share of employment at firms with at least a quarter of their workers over age 55: from 14% in 2000 to over 40% in 2022.

On the other hand, the Retail Trade and Accommodation and Food Services sectors have traditionally had relatively few firms employing a high share of older workers.

Although these sectors also experienced increases in the prevalence of firms with at least a quarter of workers over age 55, these firms still only accounted for a small share of the overall employment in these sectors: 14% of all Retail Trade employment and 10% of all Accommodation and Food Services employment.

These differences in the workforce age composition at firms create real differences between the types of workers who are exposed to business growth as opposed to business decline.

After accounting for differences in firm size, we found that firms with a higher share of older workers tended to create fewer jobs and open fewer new business establishments. However, they are equally likely to close existing establishments relative to firms with a lower share of older workers.

On average, firms with 25%-50% of workers over age 55 shrank by around 2% per year, while firms with less than 10% of workers over age 55 grew by about 2% per year.

Startups showed the same patterns.

Small start-up firms were more likely to have higher shares of young employees than more mature firms in the same size group.

Ten percent of employment at newly opened firms was at businesses where more than half of the workers were ages 19 to 24. In contrast, only 3% of employment at firms that have operated at least 11 years was at firms where more than half of the workers fell in that young age group.

Start-up firms were also more likely to have a higher share of workers ages 25 to 34 and ages 35 to 44. More mature firms were substantially more likely to have a higher share of workers over age 55.

This new research highlights the impact of demographic change on the nation’s firms and workers.

If these trends continue, the economic environments experienced by younger and older workers will continue to diverge. In addition, some firms may face challenges as a large share of their workers reach traditional retirement age. The BDS-HC tables help track these changes as the U.S. workforce continues to age.