Determinants of Old Age Wage Labor Participation and Supply in India: Changes over the Past Two Decades
Posted: 3 Jan 2013 Last revised: 21 May 2013
Date Written: July 1, 2012
Population ageing is intriguing phenomenon and especially important for India, where social benefits for the older population are low. Against the absence of social security and growing nuclearization of families, the aged individuals may have to resort to wage labor. In this context, using Employment-Unemployment Surveys (1993-94 and 2009-10) and Probit and Heckman selection models, we examine changes in determinants of wage labor participation and weekly days of labor supply of the elderly over last two decades. Findings indicate that elders from poorer and weaker sections have significantly higher compulsion for labor participation in both rural and urban areas and more so in 2009-10. Also, significant negative association is found between weekly labor supply and few poverty correlates for urban areas in 2009-10. Simulations from local polynomial smoothing regressions and ethnographic evidences are further provided to corroborate the findings. This calls for universal pension scheme, with increased pay for improved welfare of the older population.
Keywords: Ageing, older individuals, labor supply, Heckman, IGOANPS, NSS
JEL Classification: J22, J26, I38
Suggested Citation: Suggested Citation