Working Paper: NBER ID: w21971
Authors: Emiko Usui; Satoshi Shimizutani; Takashi Oshio
Abstract: This paper explores the extent to which older Japanese can potentially expand the labor supply, based on two analytic approaches: the Milligan-Wise and Cutler et al. methods. First, we examine how much older individuals could work if they worked as much as those with the same mortality rate in the past (the Milligan-Wise method). Second, we estimate how much older individuals could work if they worked as much as younger ones in similar health (the Cutler et al. method). Results from both of these methods underscore a large work capacity in old age in Japan. We further investigate differences in health capacity across education groups and find that highly educated individuals tend to have more capacity to work after they are 65 years of age.
Keywords: health capacity; labor supply; older adults; Japan
JEL Codes: H55; I12; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| historical employment rates among individuals with similar mortality rates (J17) | current work capacity (J29) |
| health (I19) | employment capacity (J68) |
| higher education levels (I23) | greater work capacity among those aged 65 and above (J14) |