## Can Healthy Aging Boost Labor Supply? Evidence from Korea

_IMF Working Papers, December 12, 2025_

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## Bibliographic details
- Authors: Bertrand Gruss, Eric Huang, Andresa Helena Lagerborg, Diaa Noureldin, Galip Kemal Ozhan
- Published: December 12, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229033381.001

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### Publication
- Authors: Bertrand Gruss, Eric Huang, Andresa Helena Lagerborg, Diaa Noureldin, Galip Kemal Ozhan
- Date: December 12, 2025
- Series: IMF Working Papers, Working Paper No. 2025/260
- Pages: 32

### Objectives and approach
- Assess whether physical abilities of individuals aged 50 years and above have been improving across successive cohorts in Korea.
- Investigate whether health improvements among older workers influence labor market outcomes, including labor force participation and retirement timing.
- Empirical strategy: instrumental variable approach to enable causal inference, proxied exogenous variation in health with the incidence of certain chronic diseases.
- Data: microdata from surveys (population of interest: individuals aged 50+ in Korea).

### Key findings
- Physical health indicators have improved on average across birth cohorts, providing evidence in favor of “healthy aging” in Korea.
- Better health increases the probability of participating in the labor force and postponing retirement.
- Quantitative impact: healthy aging has increased the labor supply of older individuals in Korea by around 1.9 percentage points per year during the 2006-20 period.
- Comparative result: the results for Korea are qualitatively comparable but quantitatively somewhat stronger than those for comparator Asian countries.

### Methodological notes and indicators
- Uses microdata from surveys to measure physical abilities and health indicators across cohorts.
- Employs an instrumental variable strategy using incidence of certain chronic diseases as instruments for exogenous variation in health.
- Analysis focuses on labor market outcomes such as decision to supply labor and decision to retire.

### Implications
- Improvements in older-worker health can meaningfully raise labor force participation and delay retirement, contributing to higher labor supply among the 50+ population.
- Observed cohort-based improvements imply that demographic aging accompanied by better health may partly offset labor supply shortfalls associated with population aging.
- Cross-country comparisons suggest Korea’s healthy-aging effect on labor supply may be stronger than in some other Asian countries, indicating scope for policy learning and further research on country-specific drivers.

*Can Healthy Aging Boost Labor Supply? Evidence from Korea — IMF Working Paper No. 2025/260.*

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_Source: https://www.imf.org/en/publications/wp/issues/2025/12/12/can-healthy-aging-boost-labor-supply-evidence-from-korea-572510_