Labor force participation by the elderly in Mexico
AbstractA brief review of the aging of the Mexican population, the high labor force participation of elderly, and the lack of retirement pensions, is followed by a causal empirical analysis using a panel data set (Mexican Health and Aging Study, MHAS) of Mexicans aged 50 and more. We find that the labor force participation of elderly men is affected by their economic situation; in particular the availability of a retirement pension (after contributions to a pension plan earlier in their life) reduces participation. A better health raises male participation rates, while the health effect is absent for women. The opposite effect, from labor force participation on health status, is negligible for both genders. Access to health services, which is obtained if the partner or a child is working, reduces participation rates. Additional analysis indicates that the same variables influence the choice for a job in the formal or the informal sector, and whether a job is held in addition to a pension. The results suggest that a redesign of the social security including retirement pensions and health care services has implications for the individuals’ participation decisions, and therefore for future contributions to the insurance and pension plans.
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Bibliographic InfoPaper provided by El Colegio de México, Centro de Estudios Económicos in its series Serie documentos de trabajo del Centro de Estudios Económicos with number 2010-06.
Date of creation: Dec 2010
Date of revision:
labor force participation; pension; health; insurance;
Find related papers by JEL classification:
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-01-16 (Economics of Ageing)
- NEP-ALL-2011-01-16 (All new papers)
- NEP-DEV-2011-01-16 (Development)
- NEP-IAS-2011-01-16 (Insurance Economics)
- NEP-LAB-2011-01-16 (Labour Economics)
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