The health capacity to work at older ages in urban China

Tapping into the older workforce is a potential economic solution to population aging, but its feasibility depends on the health capacity to work among older people. Existing estimations in OECD countries involve establishing the relationship between work and health on a younger cohort, extrapolating the relationship to older individuals, and deriving the excess health capacity as the difference between predicted and actual employment rates. However, benchmarking on the younger cohort is sub-optimal because the observable retirement-health relationship changes with age. The dual nature of the Chinese social security system provides us with a relatively neat benchmark, allowing us to estimate the excess health capacity among urban workers bench marking on rural residents in the same age range. Using the China Health and Retirement Longitudinal Study, this choice, combined with other fine-tuning, yields significantly lower but still substantial excess capacity among older urban workers than benchmarking against younger cohorts. Altogether, among urban Chinese aged 45-69, 31.2 million extra workers can potentially be added to the workforce.

Automated summary

Research shows that tapping into the older workforce is a potential economic solution to population aging, but health capacity to work is a crucial factor. Using the dual nature of the Chinese social security system as a benchmark can help estimate the excess health capacity among older urban workers more accurately compared to benchmarking against younger cohorts. According to the China Health and Retirement Longitudinal Study, there are 31.2 million extra workers that can potentially be added to the workforce among urban Chinese aged 45-69.