Abstract
This study examines the association between health status and labor supply among older adults in Indonesia. It uses data from the March 2023 National Socio-Economic Survey (Susenas), conducted by Statistics Indonesia (BPS), with an analytical sample aged 40 and above, to allows comparisons between older adults and pre-older adults groups. To estimate the probability of working, it uses a binary logistic regression. The analysis controls for various socioeconomic and regional characteristics. The findings show that the probability of working declines with age. However, being in good health significantly increases the likelihood of working among older adults. A similar pattern is observed among the pre-older adults, suggesting that the positive association between health and labor supply is not exclusive to the elderly. Assuming lower wages at older ages, the results imply that the substitution effect dominates among those aged 60–69, while the income effect is more prominent among individuals aged 70 and above. This indicates that continued working at very old ages is often driven by financial necessity rather than choice. These findings highlight the importance of expanding older adults-friendly employment opportunities and promoting better health in later life to support a more productive and dignified aging workforce.
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