A Study Of The Import Of Health Shocks On Rural Middle-Aged And Elderly Labor Supply

The age structure of our population has changed,reflecting a further increase in the ageing of the population and a decline in the number and proportion of people of working age.The change in age structure has led to a shortage of labour in the market,which will certainly have an impact on the economic and social development of the region.The change of age structure leads to the shortage of labor supply in the market,which will certainly have an impact on the regional economic and social development.In addition to the influence of educated human capital,healthy human capital has become another important factor in changing the behaviour of individuals in the labour market.Since rural middle-aged and elderly people are at a specific age when health conditions are frequent,it is of great practical importance to study how sudden illnesses may affect their labor supply.Based on a combative review of relevant literature,this thesis examines the impact of health shocks on the labor supply of rural middle-aged and elderly people aged 45-69 using data from the 2015 and 2018 China Pension and Tracking Surveys.Using various methods such as constructing column-linked cross-analysis tables,first-order difference-indifferences,lagged dependent variable models,and applying double difference-indifferences and propensity score matching,we verify that health shocks have a significant crowding-out effect on rural middle-aged and elderly labor supply.In addition,considering that different groups may differ when facing health shocks,this paper further investigates the labor supply behavior of middle and old aged people after health shocks by age group,gender,region,and different income.The results of the study showed that(1)middle-aged and elderly people who did not suffer from chronic health shocks had significantly higher labor supply and more labor hours per year than those who suffered from chronic health shocks.The percentage of those with annual labor supply time of 300-899 hours was 20.9%,and the percentage of those with annual labor supply time of more than 900 hours was also greater than those who suffered from health shocks;the labor supply of middle-aged and elderly people who did not suffer from acute health shocks was slightly higher than those who suffered from acute health shocks.(2)Health shocks significantly shortened the labor supply time of rural middle-aged and elderly people.When subjected to health shocks,the total annual labor supply time of rural middle-aged and older adults will decrease by 16.9 hours in the next period,and the change in labor behavior of rural middle-aged and older adults is more influenced by the change in health status in the previous period,i.e.,they will choose to reduce labor supply time in the current period.(3)The coefficient of male workers is significantly positive after a health shock,which means that compared with female middle-aged and elderly people,men will choose to stay at work or slightly reduce their labor hours when their health conditions change suddenly;and the older the workers are,the greater the impact of health shock on rural middle-aged and elderly people’s labor supply,which is more likely to reduce labor supply.(4)The effect between individual participation in pension insurance on labor supply time is significantly negatively correlated,indicating that rural middle-aged and elderly people who have pension insurance will appropriately shorten labor supply time.(5)Holding other control variables constant,the results of the double difference test show that chronic health shocks significantly have a negative effect on labor force participation rate,which will be reduced by 3.07 percentage points when subjected to health shocks,in line with the findings of other related studies.Based on the above findings,this paper proposes policy recommendations such as increasing investment in health capital to improve the health of the middle-aged and elderly;improving the mechanisms for medical and pension protection;personalising the use of middle-aged and elderly labour resources;and consolidating and strengthening the function of healthy ageing in rural families under the guidance of a positive view of ageing.