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Highlights:• Health problems do not usually impose immediate job restrictions, but employees cannot maintain the previous pace of work.
• If the labor market cannot offer a workplace appropriate to the life stage, then maintaining low motivated job is a matter of family material well-being.
• Employers' concerns about of older workers health are not confirmed by the results.
• Poor consumption and good health indicators do not guarantee labor motivation for older people in the labor market.
• The career choice of an older employee is subjective, although low income leads him to continue working.
• Labor mobility in old-age groups requires such combination of labor market conditions, where labor demand must corresponding with older workers capabilities.
Abstract:Work capacity problem is becoming more important in countries with an aging population, such as Russia. Age affects health and work capacity. Work incapacity risks appear in the third age. Poor health reduces ability to work. What are the reasons for leaving the labor market at the third age? How strong is the health effect? In paper we studied the health factor influence on employment and labor income in the pre-retirement and retirement age. The object of research is elderly population in the northern region with negative demographic trends (Republic of Karelia). In research we used methods of sociological survey.
According to the results, one in six respondents leaved the labor market because of the health problems. The rest of them associated changes in labor motivation with personal reasons. With health problems employees cannot maintain the previous pace of work. The health prospect has an impact on the future work capacity. There is a fear of new disease and other complications.
Material well-being is the main reason to save the job for older people with low motivation. If income does not cover consumer spending, older people increases their labor activity. The lack of decent working conditions and adequate compensation reinforce demotivation effect of poor health. Further adaptation to social conditions increases steady demobilization of elderly population.
Keywords:employment, health, labor market, labor motivation, third age
JEL-Classification: J11, J21, J24, J62
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