The Rather Limited Role of Mental Ill Health in Driving Work Beyond 50

Abstract

This paper's aim is to contribute to the literature on elderly employment barriers by exploring the role of mental health relative to that of physical health, and the complementarity between the two. The paper uses European SHARE data. It considers the distinction between the extensive and the intensive margin of work (employment rate and hours) as well as wages/productivity. Results point at the limited role of mental health in determining employment (extensive margin) and hours (the extensive margin) in comparison to physical health. Also, men's employment or hours respond more to health problems, singularly mental ones. Another result is that ill health (be it physical or mental) has no impact on wages. Finally, results suggest moderate complementarity between mental health and physical ill health in degrading people's capacity to stay in paid employment.