Active aging, preventive health and dependency: Heterogeneous workers, differential behavior

In a dynamic framework, in which early health spending mitigates productivity losses in later years, we show that the labor supply of older workers and investment in preventive health go hand-in-hand: high-productivity workers are more involved in active aging and in preventive health. As a consequence, for a delay in the legal retirement age to have the desired effect on the labor supply of the elderly, an affordable system of preventive health is required, especially among those workers with low socio-economic status. In this context, the labor supply of the elderly would expand at a faster rate than would life expectancy, thus allowing for a reduction in the dependency rate.