Physiological Aging and Life-Cycle Labor Supply across the World
October 2021 – March 2022
Population aging is argued to be a key factor in shaping the future development of societies, often through its first order effects on labor markets. Labor productivity and labor force participation rates follow a hump-shaped path over the life cycle, typically peaking in the 40s, and so if the share of elderly workers increases, it mechanically reduces productivity and labor supply. This line of reasoning, however, is based on a chronological measure of age. The distinction between chronological age and physiological age (state of health) is important because chronological aging is inevitable while physiological aging is malleable. Physiologically, a 70 years old person can be as old as a 50 years old person. In preliminary research, I have shown that, for men and women in Europe and the U.S., average health deficits at any age above 50 declined by 1.0-1.4 percent per year of later birth. These trends suggest that productivity and labor force participation, in especially of the elderly, could be stimulated by improving health.
In my research project, I will extend the method of the frailty index to measure physiological age and aging at the individual level and compute the frailty index at the level of (sub-) populations, using disease prevalence data from the Global Burden of Disease study. I will then investigate the physiological age of the workforce and the causal impact of physiological aging on productivity and labor force participation. I will investigate the determinants of differentiated aging by cohort, gender, and country.
A special focus will be on Indian case. In chronological terms, India’s population is aging particularly rapidly. Median age is projected to increase from 28 in 2020 to 46.7 at the end of the century, therewith basically catching up with the high income countries. It has been argued that these trends will have dramatic effects on productivity and labor supply. In the project, I will re-assess these projections using the metric of physiological aging. A particular focus will be on aging-induced gender inequality. Because female labor force participation is very low in India, women are less likely than men to realize the potential labor market gains from slowed down physiological aging. The combination of improving longevity and non-improving labor market outcomes for women is likely to increase inequality and dependence of elderly women on male support, a hypothesis that I will also explore my project.
Holger Strulik obtained his PhD in Economics at the University of Göttingen in 1996. Since 2012, he is Professor for Macroeconomics and Development at the University of Göttingen. His research interests include development economics, population economics, and dynamic macroeconomics. While in his earlier years his focus was on growth economics, his research focus in recent years has been on health economics. He has published in leading economic journals, such as the Journal of the European Economic Association, the Journal of Economic Growth, the Journal of Public Economics, and the Journal of Health Economics. He is an associate editor of the Journal of Demographic Economics and the Journal of the Economics of Ageing.