An Analysis Of The Impact Of Health On The Supply Of Labor Time Of Middle-age And Elderly People

When China entered into 21st century,China's population aging process has also begun.Changes in demographic structure must lead to social progress and social development.When the elderly population is relatively high in the ratio of the whole population,the labor supply will decrease,which will cause the decline of social productivity.Also,with the increasing number of the elderly,the insurance expense of retired people and the medical expense of unhealthy people have greatly increased,which undoubtedly increases the pressure of entire social security system.Human capital theory holds that human capital determines the behavior of laborers and health is widely regarded as a very important component of human capital.The health of the elderly severely limits some social activities,especially labor behavior.Therefore,staring with the health factor to study labor supply of mid-age and elderly people is of great significance for the government to develop retirement and pension policy and solve increasingly serious aging problem.The purpose of this paper is to study the effect of health on the labor supply of middle-aged and elderly people in China by means of theoretical analysis and empirical analysis.In the part of the theoretical analysis,this paper mainly discusses the relationship between health and labor supply by using human capital theory,Grossman health demand theory,active aging theory and work-leisure theory.In the part of the empirical analysis,this paper uses 2013 CHARLS follow-up survey data,and chooses above 45-year-old mid-aged and elderly people to study labor participation and labor supply.Firstly,the Probit Model is used to analyze the effect of health on the labor participation of mid-aged and elderly people and then Heckman Two-stage Model is used to analyze the effect of health on labor supply of the mid-aged and elderly people.Result shows:The decline of health status has a negative impact on labor participation and labor supply of the mid-age and elderly people.The negative impact gradually increases with the decline of health status,and urban elderly people is affected more by declining health status.In addition,the effect of health on the labor supply is different in age level.