Determinants of older people labour market decision in Ghana

Abstract

PurposeThe purpose of this paper is to examine the prevalence of labour force participation and the factors affecting labour supply among older persons in Ghana. Both the extensive and intensive margins of older persons’ labour supply were analysed.Design/methodology/approachThe paper uses nationally representative samples of household and individual data in 2016–2017 – Ghana Living Standard Survey (GLSS 7) data – for the analysis. Heckman’s sample selection model is used to analyse both the extensive and intensive margins of older persons’ labour supply.FindingsThe study found that older persons in Ghana who are pensioners, widowed, have high levels of education, poor health status and live in urban areas are less likely to participate actively in the labour market. On the other hand, being head of a household, married and owning certain assets increase the likelihood of an older person to work. Furthermore, pensions, household headship and post-secondary education have negative effects on the labour supply as having them make older persons work fewer hours per week compared to their counterparts.Originality/valueThis research is the first study to examine the prevalence of old age employment and factors that affect labour market decisions of older persons in Ghana. It also adds to the limited literature on pension and retirement decisions in developing countries.