About the project
We will investigate the relationship between health and labour market participation for older individuals in Norway. The research is based on data from the FD-Trygd database, the Norwegian Patient Register (NPR) and HELFO. Due to reverse causality problems, analysing the relationship between labour market participation and health is challenging. We will identify causal effects by exploiting exogenous variation in health (health shocks) and in labour market conditions (various reforms). It is agreed upon in the economic literature that financial incentives are important for retirement decision. Less clear in the literature is the role of health for the labour supply decision at older ages. Our first objective is to analyse the effects of health on labour supply and early retirement for older employees. We will investigate three different issues: 1) The effect of health on retirement decisions. 2) The effect of health on pension uptake. 3) The effect of health shocks on the labour market participation for the spouse. Most OECD countries are currently undertaking measures to prolong the working careers of older workers. However, an important question - which has been largely overlooked by policy makers - concerns the effect of later retirement on individual well-being and, in particular, on health. Our second objective is to analyse how early retirement and reduced work load/working hours affects health. Here we will focus on the following issues: 1) How early retirement affects health. 2) Health effects of increased vacation. 3) Health effects of reduced work load.
Funding source: The Norwegian Research Council