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Labour Force Participation of the Elderly in Europe: The Importance of Being Healthy

Author Info

  • Kalwij, Adriaan

    ()

    (Utrecht School of Economics)

  • Vermeulen, Frederic

    ()

    (Tilburg University)

Abstract

In this paper we study labour force participation behaviour of individuals aged 50-64 in 11 European countries. The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE). The empirical analysis shows that health is multi-dimensional, in the sense that different health indicators have their own significant impact on individuals' participation decisions. Health effects differ markedly between countries. A counterfactual exercise shows that improved health conditions may yield over 10 percentage points higher participation rates for men in countries like Austria, Germany and Spain, and for females in the Netherlands and Sweden. Moreover, we show that the declining health condition with age accounts considerably for the decline in participation rates with age.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1887.

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Length: 30 pages
Date of creation: Dec 2005
Date of revision:
Publication status: published as: "Health and labour force participation of older people in Europe: what do objective health indicators add to the analysis?" in: Health Economics, 2008, 17(5), 619-638.
Handle: RePEc:iza:izadps:dp1887
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Keywords: health; labour force participation; SHARE; retirement;

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Find related papers by JEL classification:
  • I10 - Health, Education, and Welfare - - Health - - - General
  • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
  • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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  2. Kerkhofs, Marcel & Lindeboom, Maarten & Theeuwes, Jules, 1998. "Retirement, financial incentives and health," Serie Research Memoranda 0042, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
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  10. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1, May.
  11. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
  12. repec:dgr:kubcen:200475 is not listed on IDEAS
  13. Jonathan Gruber & David Wise, 2005. "Social Security Programs and Retirement around the World: Fiscal Implications, Introduction and Summary," NBER Working Papers 11290, National Bureau of Economic Research, Inc.
  14. Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-80, September.
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  17. repec:crs:ecosta:es403-404a is not listed on IDEAS
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Cited by:

  1. Serguey Ivanov, 2009. "Demographic and economic factors of labour supply: Long-term projections and policy options for France, Germany, Italy and the United Kingdom," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 7(1), pages 83-122.
  2. Anders Stenberg & Olle Westerlund, 2013. "Education and retirement: does University education at mid-age extend working life?," IZA Journal of European Labor Studies, Springer, vol. 2(1), pages 1-22, December.
  3. Van Bui & Michael Stolpe, 2010. "The impact of new drug launches on the loss of labor from disease and injury: evidence from German panel data," International Journal of Health Care Finance and Economics, Springer, vol. 10(4), pages 315-346, December.
  4. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.

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