Determinants of Labor Force Participation of Older People in Vietnam

Abstract:As the proportion of the older population (those aged 60 and over) keeps increasing quickly in Vietnam, issues related to older individuals’ labor market behavior have drawn a great deal of public attention. This paper aims to identify the determinants of the Vietnamese older people’s decision to be active in the labor force. We used data from the Vietnam Aging Survey (VNAS) in 2011 - the first-ever nationally representative survey on older people - which comprised 2,789 respondents. We employed probit models and other statistical methods in order to ensure the validity of the results. The paper demonstrated that various individual factors (such as age and health status) and household-related factors (such as area of living) significantly contributed to older people’s decision about participating in the labor force. More interestingly, the effects of the above factors were statistically and significantly different for males and females and those living in urban and rural areas. To reach ‘active ageing’ in terms of work and income security, Vietnam should have some immediate and long-term solutions so to encourage the participation of older people in the labor force and improve their health and living conditions.