Working longer or working harder? Subjective survival expectations and labor supply in China

Qianqian Yang, Zihan Ye and Rongda Chen

International Review of Economics & Finance, 2024, vol. 91, issue C, 827-847

Abstract: We investigate the impact of subjective survival expectations on individuals’ labor supply at the extensive and intensive margins in China. Using data from four waves of the China Health and Retirement Longitudinal Study we find: Subjective survival expectations are formed rationally. Individuals with greater survival expectations have higher labor supply, because the perception of longevity risk motivates them to prepare financially for old age. Such an effect varies across groups with different status of household registration. Labor supply adjustment occurs in both labor participation and weekly hours worked among rural workers, whereas it is reflected only in hours worked among urban workers. This is consistent with the proposed selection mechanism whereby the constraints of the mandatory retirement policy induce a restrictive choice regarding labor supply among those still working in the public sector when faced with longevity risk. Our findings contribute to a better understanding of the differential labor supply responses to the fact of aging under institutional constraints and provide important policy implications for future retirement policy reforms.

Keywords: Subjective survival expectations; Labor supply; Urban-rural disparity; Rational expectations hypothesis; Longevity risk (search for similar items in EconPapers)
JEL-codes: D15 D91 J22 J26 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056024000443
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:91:y:2024:i:c:p:827-847

DOI: 10.1016/j.iref.2024.01.044

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().