Health Capacity to Work among Older Malaysians

Abstract

This paper uses two methodologies to explore the extent to which greater labor force participation among older Malaysians can expand Malaysia’s labor supply. The Milligan–Wise method estimates the potential to increase the labor force participation rate of older Malaysians by estimating how much they would work if they were to work as much as those with the same mortality rate in the past. The Cutler, Meara, and Richards-Shubik ( 2013 ) method estimates the same potential by estimating how much older Malaysians would work if they worked as much as their younger counterparts in similar health. We made further simulations to quantify the capacity of older Malaysians to work after they are 60 years old. The results show significant additional work capacity among older people in Malaysia, particularly males, urban dwellers, and those with low educational attainment.