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Physiological aging and life-cycle labor supply across countries.
Casper Worm Hansen1, Carl-Johan Dalgaard1, Holger Strulik2
1Department of Economics, University of Copenhagen, Copenhagen, Denmark.
Plos One
|November 29, 2023
Summary
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.
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.
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