Education and Health as Determinants of Labour Force Participation and the Consequences of Ageing


The project studies the future development of labour force participation against the backdrop of changes in education and health. We develop and apply a dynamic microsimulation model to simulate changes in the population and workforce in the countries studied (Germany, France, Italy, Spain and Austria). While labour force participation and employment are the primary outcomes of interest, the microsimulation explicitly models multiple determinants of participation at the individual level within a single model. On the aggregate level, the model reproduces the Eurostat numbers of births, deaths and migrants, resulting in identic population projections by age and sex. The starting population is based on data from the 2014 European Union Statistics on Income and Living Conditions (EU-SILC) for the respective countries. Education, health and household characteristics are applied as determinants of participation behaviour, as well as information on the probability of early retirement. Health status is modelled with the help of a latent health indicator, enabling to order individuals within each country along with the health distribution. Information on health status is derived from the 2017 EU-SILC ad-hoc module “Health and children’s health”, that contains variables on self-rated health, health limitations as well as healthcare service use.

  • Organization Austrian Institute of Economic Research (WIFO)

  • Funding: This 2020-2021 project was commissioned by the German Bertelsmann Foundation