Health Capacity to Work at Older Ages in the Republic of Korea

Using the Milligan and Wise (2015) and Cutler, Meara, and Richards-Shubik (2013) methodologies, we examine (i) how much would people today with a given mortality rate or life expectancy work if they were to work as much as those with the same mortality rate worked in the past, and (ii) how much could older adults extend their working lives if their health status improved. The results point to a sizable health capacity to work (HCW) among both older Korean men and women. Furthermore, the results imply that HCW is concentrated among more educated urban senior residents with access to the statutory pension system. We explain our results in the context of the Republic of Korea's labor markets and old-age support systems. The results for the Republic of Korea imply that the previous results for other high-income economies, such as European countries and the United States, may not be applicable to high-income economies with underdeveloped pension systems.