Opportunities and Constraints for Older Workers in Taiwan

This paper studies the labor force behavior of Taiwanese elderly within the context of rapid demographic and socioeconomic transformations. Recent socioeconomic development has generated various push and pull factors affecting elderly persons' labor force decisions. On the one hand, rapid economic growth has created a strong demand for labor, which gives the elderly incentives and opportunities to continue labor force participation. On the other hand, increasing pension coverage and familiarity with a leisurely life style may make retirement an attractive alternative to work.

Using micro data from the Survey of the Health and Living Status of the Elderly in Taiwan (1989), the researchers apply multivariate logit models to test the associations between individual factors, family conditions, and labor force participation of the elderly. They find that elderly employment status is significantly and positively associated with good health, being self-employed, being the head of the household and owning property. Class of worker, which is used as a proxy for pension status, shows a strong association with employment status in old age. Despite greatly increasing demand for labor and no tax penalty on post-retirement earnings, the elderly whose major occupation was in the government sector (e.g., workers with guaranteed pension coverage) are much less likely than others to work in old age. As the retirement benefits became more widely available and the proportion of the work force that are vested with occupational pensions increases, further declines in the labor force participation of the elderly may occur.

Dataset(s): Survey of Health and Living Status of the Elderly: Taiwan, 1989.