The health capacity to work at older ages in urban China

Bo Hou, Gewei Wang, Yafeng Wang and Yaohui Zhao

China Economic Review, 2021, vol. 66, issue C

Abstract: Tapping into the older workforce is a potential economic solution to population aging, but its feasibility depends on the health capacity to work among older people. Existing estimations in OECD countries involve establishing the relationship between work and health on a younger cohort, extrapolating the relationship to older individuals, and deriving the excess health capacity as the difference between predicted and actual employment rates. However, benchmarking on the younger cohort is sub-optimal because the observable retirement-health relationship changes with age. The dual nature of the Chinese social security system provides us with a relatively neat benchmark, allowing us to estimate the excess health capacity among urban workers benchmarking on rural residents in the same age range. Using the China Health and Retirement Longitudinal Study, this choice, combined with other fine-tuning, yields significantly lower but still substantial excess capacity among older urban workers than benchmarking against younger cohorts. Altogether, among urban Chinese aged 45–69, 31.2 million extra workers can potentially be added to the workforce.

Keywords: Work capacity; Health; Retirement; China; CHARLS (search for similar items in EconPapers)
JEL-codes: H55 I10 J26 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:66:y:2021:i:c:s1043951x20301784

DOI: 10.1016/j.chieco.2020.101581

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