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The Link between Health and Working Longer: Disparities in Work Capacity

Author

Listed:
  • Benjamin Berger
  • Italo Lopez Garcia
  • Nicole Maestas
  • Kathleen J. Mullen

Abstract

Good health is important for employment at older ages. However, little is known about how health-related functional abilities interact with occupational demands to shape work capacity. Using new data, we quantify individuals’ functional abilities, combine that information with occupation-specific ability requirements, and create new measures of individuals’ potential occupations and earnings. We find that average functional abilities, potential occupations, and potential earnings decline only slightly with age, indicating that many Americans maintain work capacity into their late 60s. Gaps in work capacity by race/ethnicity and gender are small, suggesting health is not a major driver of observed earnings disparities. However, gaps in work capacity by education are large and increase with age, suggesting diminished prospects for working longer among those with less education. Although work capacity among Black respondents improves across cohorts, today’s middle-aged white Americans have lower work capacity than those now at retirement age, suggesting rising rates of work disability as these cohorts age.

Suggested Citation

  • Benjamin Berger & Italo Lopez Garcia & Nicole Maestas & Kathleen J. Mullen, 2022. "The Link between Health and Working Longer: Disparities in Work Capacity," NBER Working Papers 30036, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30036
    Note: AG LS
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    References listed on IDEAS

    as
    1. Italo Lopez Garcia & Nicole Maestas & Kathleen J. Mullen, 2019. "Latent Work Capacity and Retirement Expectations," Working Papers wp400, University of Michigan, Michigan Retirement Research Center.
    2. Jennifer Karas Montez & Anna Zajacova & Mark D. Hayward & Steven H. Woolf & Derek Chapman & Jason Beckfield, 2019. "Educational Disparities in Adult Mortality Across U.S. States: How Do They Differ, and Have They Changed Since the Mid-1980s?," Demography, Springer;Population Association of America (PAA), vol. 56(2), pages 621-644, April.
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    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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