1 Introduction
The key objective of this paper is to identify the principal factors which govern the labour force participation decisions of older New Zealanders, using longitudinal data. Particular attention is given to the role of health.
New Zealand is on the cusp of an important social and demographic change, as the so-called baby boomers began to turn 65 in 2011. Forecasts suggest that by 2051, 23% of the population will be aged over 65, a stark change from 13% in 2011 (Statistics New Zealand, 2009). The implications of this demographic shift are both significant and pervasive. Coupled with increasing life expectancies, fiscal pressures on the government to provide social security and healthcare for older individuals will heighten, and demand for workers in the healthcare and age-related sectors will likely increase. However, there will be a lower proportion of prime working-age individuals (aged 15 to 64) to provide for this growing group of older people.
The perceived reliance of the older population is often expressed in terms of the “dependency ratio”. The dependency ratio relates the number individuals in the “dependent” group, those aged 65 and older, to the number of prime working-age individuals. Projections of this ratio alone paint an ominous picture of increasing numbers of “dependent” older individuals relative to “workers”. However, the conditions surrounding the dependency of older individuals are not static. Social attitudes and expectations toward older individuals are changing, as are their education, skills, health and life expectancy relative to previous cohorts, particularly for women. Recognising such trends, we might ask how “dependent” our older generation really is, and what actions may be taken to alleviate barriers to continued labour force participation.
The sources of data for this project are the Health Work and Retirement (HWR) survey, and its successor project, the New Zealand Longitudinal Study of Ageing (NZLSA). These two surveys canvass older New Zealanders on a range of issues, including labour force status, health, wealth, well-being and transitions into retirement. The HWR participants were surveyed twice (in 2006 and 2008), and these participants were incorporated as a sub-population into the NZLSA project, and surveyed once more in 2010. It is therefore possible to follow changes in labour market participation of individuals over a number of years.
The paper is structured as follows. Section 2 explores the context and motivation for this work, while Section 3 describes the data. Section 4 outlines our definitions of participation and retirement. Section 5 addresses various issues that arise in the measurement of health status, describes the health measures used in this paper, and presents some descriptive analysis of the association between health status and participation. Section 6 describes the multivariate models used to analyse the determinants of participation. Section 7 presents the results of these models, and Section 8 concludes.
