Health and Labor Supply in Rural China

Yaoyao Zhu, University of Southern California

Aging in developing countries, especially rural areas, is more difficult compared to developed countries. In rural regions where formal pension is almost absent, old-age support heavily relies on elderly’s labor income. Therefore, it is essential to understand the factors that affect the elderly’s labor supply decisions. For the old-aged adults who are mostly involved in physically demanding jobs, it is particularly important to examine the role of health. Using the CHARLS National Baseline, we examine the link between health and rural elderly’s labor supply. The findings suggest a strong association between them. Specifically, individuals with poor SRH or disability tend to leave the labor force at old ages. Men with poor SRH spend less time working; however, no significant correlation has been found for women. These associations persist after controlling for all the covariates. In addition, differentiated health effects have been detected for the elderly with different levels of wealth.