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All Work and No Play: Pecuniary Versus Non-Pecuniary Factors in the Labour Supply of the Elderly

  • J L Ford
  • K Park
  • S Sen
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    Given falling birth rates, ageing baby boomers approaching retirement age as well as a pension crisis in most advanced economies, understanding the characteristics of the labour supply function of the elderly have taken on a new significance. Even in developing countries, with labour surplus economies, this is a major issue as these poor countries try to build a pension scheme with at least a minimum amount of state provision for the elderly. What motivates retired people to enter or continue in the labour force is the focus of our analysis. We use panel data from Korea which is an interesting country since it transited from developing to developed economy status within the last few decades and therefore exhibits characteristics of both underdevelopment and economic advancement. The econometric methods include probit models of: pooled data; panel data with random effects; and 2SCML, to allow for possible endogeneity bias induced by the self-declared health status of the elderly. We stress the crucial importance of pecuniary and non-pecuniary factors in determining labour supply of the elderly. Contrary to expectations, non-pecuniary factors such as health status are crucial in the decision-making process of whether to work or not to work for the elderly.

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    File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/09-08.pdf
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    Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 09-08.

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    Length: 49 pages
    Date of creation: Jul 2009
    Date of revision:
    Handle: RePEc:bir:birmec:09-08
    Contact details of provider: Postal: Edgbaston, Birmingham, B15 2TT
    Web page: http://www.economics.bham.ac.uk

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