Do people work longer when they live longer?

Abstract

This paper examines the relationship between life expectancy and labor force participation at older ages. It uses information on life expectancy from the U.S. Small-Area Life Expectancy Estimates Project and information on labor force participation from the five-year American Community Survey. Critical components of the analysis include merging the Census-tract-level information from the two data sets and estimating a spatial model of the relationship between life expectancy and labor force participation for men and women ages 55 to 74 that exploits the geographic variation in labor force participation and life expectancy. The main limitation of the study is that our analysis may understate the relationship between life expectancy and labor force participation to the extent that people are unaware of the geographic variation in life expectancy and, consequently, how it might affect their retirement planning.