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

IZA Discussion Paper No. 1887

CentER Discussion Paper Series No. 2005-130

30 Pages Posted: 13 Jan 2006

See all articles by Adriaan Kalwij

Adriaan Kalwij

IZA Institute of Labor Economics

Frederic Vermeulen

Tilburg University - CentER; IZA Institute of Labor Economics

Date Written: December 2005

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.

Keywords: SHARE, labour force participation, health, retirement

JEL Classification: I10, J22, J26

Suggested Citation

Kalwij, Adriaan S. and Vermeulen, Frederic, Labour Force Participation of the Elderly in Europe: The Importance of Being Healthy (December 2005). IZA Discussion Paper No. 1887, CentER Discussion Paper Series No. 2005-130 , Available at SSRN: https://ssrn.com/abstract=875383 or http://dx.doi.org/10.2139/ssrn.875383

Adriaan S. Kalwij

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Frederic Vermeulen (Contact Author)

Tilburg University - CentER ( email )

P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 3196 (Phone)

HOME PAGE: http://center.uvt.nl/staff/vermeulen/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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