Widening Health Gap in the U.S. Labor Force Participation at Older Ages

Abstract

Using micro data from the CPS and the HRS, we document changes in labor force participation at older ages in the U.S. since the mid 1990s. Our main finding is that the over two-decade increase in participation is solely driven by individuals in good health, and does not differ across either educational or occupational groups. This phenomenon may importantly affect the results of social security reforms aiming at rising the mandatory retirement age, and may exacerbate the health gap in lifetime earnings.