Health and Employment Amongst Older Workers

33 Pages Posted: 3 Mar 2020

See all articles by Jack Britton

Jack Britton

Institute for Fiscal Studies (IFS)

Eric French

Department of Economics; Institute for Fiscal Studies (IFS)

Date Written: February 2020

Abstract

Health and employment are strongly correlated. This paper reviews the existing evidence and brings in new evidence on the following issues: (a) the measurement of health; (b) the impact of health on employment rather than just the association between health and employment; (c) the mechanisms by which health impacts employment; and (d) the likely effect of recent retirement and disability policy changes in the UK. Although the magnitude of the estimated effect of health on employment varies greatly from study to study, some of this variation is driven by the health measure used. Given our preferred measure, the evidence suggests that 5-10 percent of the employment decline between ages 50 and 70 is due to declining health in England, with the largest effects among low-educated men. Most of the effect comes through declining preferences for work and lower productivity when in bad health, although some of the effect is from government-provided incentives to not work when in bad health, such as from disability benefits.

Keywords: health, Labour Supply, retirement

JEL Classification: I10, I18, J26

Suggested Citation

Britton, Jack and French, Eric, Health and Employment Amongst Older Workers (February 2020). CEPR Discussion Paper No. DP14422, Available at SSRN: https://ssrn.com/abstract=3547355

Jack Britton (Contact Author)

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Eric French

Department of Economics ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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