Labour force withdrawal of the elderly in South Africa

This paper analyses labour market behaviour of the elderly in South Africa, focusing on the Black/African population group. The analysis uses data from the 2001 census and 1996 census, the Labour Force Surveys for September 2000 and 2001, and the Income and Expenditure Survey for 2000. Findings show that participation rates fall fairly rapidly after age 45, with particularly sharp declines in both participation and work at the age of eligibility for the old-age pension. Measures of unused productive capacity demonstrate that South Africa’s age profile of labour force withdrawal compares favourably with some OECD countries. The hazard rate indicates that the age of pension eligibility is associated with increased rates of retirement. The paper also examines major determinants of elderly labour supply, including household structure and marital status, public and private pensions and schooling and, finally, calculates probit regressions to gain a clearer picture of the variables affecting the work activity of the elderly.