Labour Force Participation, Human Capital and Wellbeing among Older New Zealanders

Michael Cameron, Peggy Koopman-Boyden () and Matthew Roskruge
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Peggy Koopman-Boyden: University of Waikato

Working Papers in Economics from University of Waikato

Abstract: Along with many other countries, New Zealand is experiencing a rapid rise in the population of older people, both in absolute terms and also as a percentage of the overall population. Older people are increasingly likely to participate in formal employment beyond the age of pension eligibility (65 years in New Zealand). Earlier research has showed that working full-time reduces life satisfaction among New Zealanders 65 years and older, and that this relationship is robust to the inclusion of measures of job satisfaction or the desire to work more or fewer hours. In this paper we investigate the relationship between labour force participation and life satisfaction among older New Zealanders, with specific focus on the mediating role of human capital in the relationship. We utilise data from several waves of the New Zealand General Social Survey (n=5856), and account for the bias due to selection effects and endogeneity using instrumental variables analysis, and control for mental and physical health. Our identification strategy is to use gender, regional-level employment rates, and migration rates as instruments for labour force status. Our results suggest that, should improving wellbeing for older people become an explicit government priority, investing in reducing the push factors for older people to remain in the full-time employment may improve wellbeing.

Keywords: labour force participation; retirement; subjective wellbeing; life satisfaction; human capital; New Zealand (search for similar items in EconPapers)
JEL-codes: I31 J14 J21 J24 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015-09-30
New Economics Papers: this item is included in nep-age, nep-dem, nep-hap and nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:wai:econwp:15/07

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