Volume 8, Issue 1
1.School of Economics, Nanjing University of Finance & Economics;Nanjing, China
2.School of Finance, Nanjing University of Finance & Economics;Nanjing, China
Published： 30 June 2024 ，
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Chen Jie,Li Xiaoxuan,Wen Chen,et al.Does Formal Sector Impact the Elderly Labor Supply? A study based on China Family Panel Studies[J].Social Policy Review,2024,08(01):95-115.
Chen Jie,Li Xiaoxuan,Wen Chen,et al.Does Formal Sector Impact the Elderly Labor Supply? A study based on China Family Panel Studies[J].Social Policy Review,2024,08(01):95-115. DOI： 10.47297/wspsprwWSP2515-471006.20240801.
Using data from China Family Panel Studies
this study examines the impact of the sector in which individuals work on their labor supply after retirement. Our findings show that the work sector has a significant impact on labor supply after retirement. Using the linear probability
probit
and instrumental regression models
the results support that individuals working in the formal sector pre-retirement are less likely to stay in the labor market than those working in the informal sector. The mechanism analysis shows that a wage gap is evident between the formal and informal sectors before retirement
which becomes narrower after retirement. This is because it is difficult for individuals in the formal sector to stay in place after retirement
resulting in a rapid wage decline. Because of the substitution effect produced by the decline in wage income
it appears that individuals working in the formal sector before retirement are reluctant to stay in the labor market after reaching retirement age. Moreover
the elderly working in the formal sector usually receive higher pensions after retirement
and this income effect reduces the elderly's participation in the labor market after retirement.
labor supplythe formal sectorthe pensions
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