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Physiological aging and life-cycle labor supply across countries.

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Physiological aging, measured by a frailty index, negatively impacts labor force participation. Deteriorating health explains nearly all age-related declines in employment across 180 countries.

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Area of Science:

  • Gerontology
  • Economics
  • Public Health

Background:

  • Labor force participation declines with age.
  • The role of physiological aging and health deficits in this decline is not fully understood.
  • Existing research often struggles to disentangle health impacts from other age-related factors.

Purpose of the Study:

  • To construct a comprehensive frailty index for international comparison.
  • To quantify the impact of physiological aging on labor force participation.
  • To determine the extent to which deteriorating health explains age-related employment trends.

Main Methods:

  • Developed a cohort-based frailty index for 180 countries (1990-2019).
  • Employed a three-dimensional panel framework (country, cohort, age).
  • Utilized a compensating law of physiological aging to address reverse causality.

Main Results:

  • A 1% increase in the frailty index reduces labor force participation by 0.6 percentage points.
  • Health deficits accumulate at approximately 3% per year of life.
  • Physiological aging accounts for nearly all age-related decreases in labor force participation.

Conclusions:

  • Deteriorating health is a primary driver of age-related labor force participation decline.
  • The frailty index is a robust measure for assessing health impacts on economic activity.
  • Policy interventions targeting health maintenance may support sustained labor force engagement in aging populations.