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Health Capacity to Work at Older Ages: Evidence from the United Kingdom

In: Social Security Programs and Retirement around the World: The Capacity to Work at Older Ages

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  • James Banks
  • Carl Emmerson
  • Gemma Tetlow
Abstract
This paper estimates how much additional work capacity there might be among men and women aged between 55 and 74 in the United Kingdom, given their health, and how this has evolved over the last decade. The objective is not to suggest how much older people should work but rather to shed light on how much ill-health (as opposed to other constraints and preferences) constrains older individuals’ ability to work. We present two alternative methods, both of which rely on constructing a ‘counterfactual’ employment rate for older people based on the behaviour of other similarly healthy individuals. Both methods suggest that there is significant additional capacity to work among older men and women, but that this has been declining over recent years for women (and possibly also for men). This latter finding suggests that the increase in employment rates among older people seen over the last decade are more rapid than would have been expected based on the improvements seen in health alone.
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Suggested Citation

  • James Banks & Carl Emmerson & Gemma Tetlow, 2017. "Health Capacity to Work at Older Ages: Evidence from the United Kingdom," NBER Chapters, in: Social Security Programs and Retirement around the World: The Capacity to Work at Older Ages, pages 329-357, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:13748
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    References listed on IDEAS

    as
    1. Arie Kapteyn & James P. Smith & Arthur van Soest, 2007. "Vignettes and Self-Reports of Work Disability in the United States and the Netherlands," American Economic Review, American Economic Association, vol. 97(1), pages 461-473, March.
    2. David A. Wise, 2012. "Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms," NBER Books, National Bureau of Economic Research, Inc, number wise11-1.
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    4. James Poterba & Steven Venti & David A. Wise, 2013. "Health, Education, and the Postretirement Evolution of Household Assets," Journal of Human Capital, University of Chicago Press, vol. 7(4), pages 297-339.
    5. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1.
    6. James Banks & Richard Blundell & Carl Emmerson, 2015. "Disability Benefit Receipt and Reform: Reconciling Trends in the United Kingdom," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 173-190, Spring.
    7. Disney, Richard & Webb, Steven, 1991. "Why Are There So Many Long Term Sick in Britain?," Economic Journal, Royal Economic Society, vol. 101(405), pages 252-262, March.
    8. John Bound & Arline Geronimus & Javier Rodriguez & Timothy Waidmann, 2014. "The Implications of Differential Trends in Mortality for Social Security Policy," Working Papers wp314, University of Michigan, Michigan Retirement Research Center.
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    Cited by:

    1. James Banks & Carl Emmerson, 2018. "A Lifetime of Changes: State Pensions and Work Incentives at Older Ages in the UK, 1948–2018," NBER Chapters, in: Social Security Programs and Retirement around the World: Reforms and Retirement Incentives, pages 397-434, National Bureau of Economic Research, Inc.
    2. Vincent VANDENBERGHE, 2021. "Health, cognition and work capacity beyond the age of 50: International evidence on the extensive and intensive margins of work," International Labour Review, International Labour Organization, vol. 160(2), pages 271-310, June.
    3. James Banks & Carl Emmerson & Gemma Tetlow, 2018. "Long-Run Trends in the Economic Activity of Older People in the United Kingdom," NBER Chapters, in: Social Security Programs and Retirement around the World: Working Longer, pages 267-297, National Bureau of Economic Research, Inc.
    4. Vandenberghe, Vincent, 2021. "Work Beyond the Age of 50. What Role for Mental v.s. Physical Health?," GLO Discussion Paper Series 796, Global Labor Organization (GLO).
    5. Vandenberghe, Vincent, 2019. "Health, Cognition and Work Capacity Beyond the Age of 50," GLO Discussion Paper Series 295, Global Labor Organization (GLO).
    6. Hou, Bo & Wang, Gewei & Wang, Yafeng & Zhao, Yaohui, 2021. "The health capacity to work at older ages in urban China," China Economic Review, Elsevier, vol. 66(C).

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    More about this item

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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