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Continuing to work longer with an occupational disability


Publication number: 2016-89
Authors: S. Vriend, A. Heyma, M. van der Noordt, D. Deeg
Commissioned by: Ministry of Social Affairs and Employment
Published by: SEO Amsterdam Economics
ISBN: 978-90-6733-841-7

Health plays an important role in the retirement decision of older workers aged 55 to 70. Given the expected developments in health status with increasing age, forecasts show that the employment rate of younger cohorts until the year 2030 can and will increase. This is mainly due to changes in labour force participation across cohorts, which is partly caused by policy changes in the recent past.

In recent decades, the employment rate of older Dutch people in the ages of 55 to 70 has increased significantly. At the same time, life expectancy has continued to increase. Now that the possibilities of retiring from the labour market prematurely have been limited considerably and the state pension age continues to be raised, the question is whether older people, in view of their health status and the workload that they can handle, are actually capable of remaining active in the labour market longer. Improved life expectancy provides opportunities for older people to continue to work longer, but to what degree does the normal development of their health status provide an obstacle to do so?

This study forecasts the labour force participation of older people (55 through 70 years old) in the period from 2015 up until 2030. First, the study maps the developments in health status during ageing using data from the Longitudinal Aging Study Amsterdam (LASA). By explicitly taking the labour market status of respondents into account, these analyses account for the interrelation between work and health. The analyses show that between the ages of 55 and 70 out of all studied health aspects the risk of functional limitations increases the most on average (quadratic), followed by the risk of chronic diseases (approximately linear). With regard to symptoms of depression and general health perception a trend with age is hardly noticeable.

The health status of older workers aged 55 to 70 has a significant impact on their retirement decision. In this regard, there is a marked difference in the impact of the health status until approximately the age of 63 and at higher ages. From the age of 63 years onwards, the health status is becoming more important in the decision to either continue to work or to retire. In the estimated labour force exit model, developments in health status do no immediately provide an explanation for the growth in labour force participation of 55 to 70-year olds, though. Younger cohorts leaving the workforce less often use disability insurance or early retirement as an exit route. This can be attributed largely to policy changes in the recent past.


Category: 2017, Arjan Heyma, Sandra Vriend, Labour & Education, Healthcare & Social Security