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

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  • Kalwij, Adriaan

    (Utrecht School of Economics)

  • Vermeulen, Frederic

    (KU Leuven)

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.

Suggested Citation

  • Kalwij, Adriaan & Vermeulen, Frederic, 2005. "Labour Force Participation of the Elderly in Europe: The Importance of Being Healthy," IZA Discussion Papers 1887, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1887
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    2. Oliver Fritz & Peter Mayerhofer & Reinhard Haller & Gerhard Streicher & Florian Bachner & Herwig Ostermann, 2013. "Die regionalwirtschaftlichen Effekte der österreichischen Krankenanstalten," WIFO Studies, WIFO, number 46672, June.
    3. Anders Stenberg & Xavier Luna & Olle Westerlund, 2012. "Can adult education delay retirement from the labour market?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 677-696, January.
    4. Ronald Hagan & Andrew M. Jones & Nigel Rice, 2009. "Health and Retirement in Europe," IJERPH, MDPI, vol. 6(10), pages 1-20, October.
    5. Teresa Ghilarducci, 2010. "The future of retirement in aging societies," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 319-331.
    6. Hostenkamp, Gisela & Stolpe, Michael, 2008. "Optimal health and retirement policies amid population aging," Kiel Working Papers 1428, Kiel Institute for the World Economy (IfW Kiel).
    7. Ajantha, Sisira Kumara & Tharaka, Sameera Senanayaka, 2012. "The Employment Status of the Elderly in Sri Lanka: Patterns and Determinants," MPRA Paper 42977, University Library of Munich, Germany, revised 30 Nov 2012.
    8. 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 Economics and Management, Springer, vol. 10(4), pages 315-346, December.
    9. Anders Stenberg & Olle Westerlund, 2013. "Education and retirement: does University education at mid-age extend working life?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-22, December.
    10. Edwin van Gameren, 2008. "Labor Force Participation of Mexican Elderly: The Importance of Health," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 23(1), pages 89-127.
    11. Bui, Thi Mai Van & Stolpe, Michael, 2007. "The impact of new drug launches on the loss of labor from disease and injury: evidence from German panel data," Kiel Working Papers 1317, Kiel Institute for the World Economy (IfW Kiel).
    12. Ovin Rasto & Divjak Marko & Čič Živa Veingerl & Maček Anita, 2021. "Elderly Population and Labour Market Stabilization in Europe - The Case of Slovenia," Naše gospodarstvo/Our economy, Sciendo, vol. 67(2), pages 40-48, June.
    13. Marchand, J. & Smeeding, T., 2016. "Poverty and Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 905-950, Elsevier.
    14. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.
    15. Rolle Remi Ahuru & Efegbere Henry Akpojubar, 2020. "The Effects Of Ill-Health And Disabilities On Labour Force Participation Among Nigerian Households," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 5(2), pages 8-19, September.
    16. Netta Achdut & Lea Achdut, 2022. "Joint Income-Wealth Poverty in a Cross-National Perspective: The Role of Country-Level Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 499-541, November.
    17. 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.

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    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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