Health Capacity to Work at Older Ages: Evidence from the Republic of Korea and the People’s Republic of China

Cheol Kon Park () and Sang-Hyop Lee ()
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Cheol Kon Park: Ministry of Economy and Finance, Republic of South Korea
Sang-Hyop Lee: University of Hawaii
Authors registered in the RePEc Author Service: Timothy J. Halliday, Lester Robert Lusher and Aureo de Paula

No 202204, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: Using the methodology of CMR (Cutler, Meara, and Richards-Shubik, 2013), this paper estimates the extent to which older adults can potentially extend their work lives due to the improvement of health status (health capacity to work) in the Republic of Korea (Korea) and the People’s Republic of China (the PRC). Besides, we estimate the growth potential when utilizing the capacity to work by linking the results to the National Transfer Accounts (NTA) of each country. Unlike the other advanced countries, only a part of the elderly receives old-age pensions in both countries, which further enables us to simulate the health capacity to work for the eligible pension group and the other who is not. The estimated health capacity to work is also reported for various sub-groups. The results suggest that the two countries seem to have much smaller economic gains from the health capacity to work, compared with other advanced countries. The results also imply that the unused health capacity to work is concentrated only on wealthy older people. The results for the PRC suggest that while the elderly in rural areas tend to work more regardless of their pension status, urban residents show very similar patterns to Korea.We explain the results by linking them to Korea and the PRC's labor markets and their old-age support systems. All these results indicate that it might be misleading to interpret the results in Coile, Milligan, and Wise (2017) as a major outcome of the statutory retirement age for the economies in countries with the less developed pension system.

Keywords: Population aging; Elderly health capacity; Pension eligibility; Old-age support system (search for similar items in EconPapers)
JEL-codes: J11 J14 J19 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-env
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