Decomposing the U-shaped trend in older adults’ labour force participation in Hong Kong: An age–period–cohort analysis

• In Event: Aging and the Life Course Section Roundtables
  In Refereed Roundtable (90 minute): 11: Employment, Job Quality, and Retirement

Abstract

Rising labour force participation (LFP) at older ages is a marked and growing global phenomenon. While age–period–cohort (APC) models are increasingly used to study LFP trends, relatively few studies focus specifically on older adults or decompose their LFP trends using APC methods. Over the past three decades, LFP among adults aged 65 and over (65+) in Hong Kong has followed a pronounced U-shaped pattern. This study asks how age, period, and cohort processes jointly produced the observed pattern in older adults’ LFP. We analyse 5% microdata from the Hong Kong population censuses and by-censuses from 1991 to 2021. We estimate both a cross-classified fixed-effects model (CCFEM) and a cross-classified random-effects model (CCREM). The APC analysis shows that, from 1991 to 2006, the 65+ population is dominated by earlier, low-LFP cohorts, while period effects become increasingly negative. The combination of an unfavourable period trend and ageing within a low-participation cohort structure drives the decline in the overall LFP rate among older adults. From 2006 to 2021, however, the composition shifts markedly: high-participation cohorts born after World War II enter and increasingly dominate the 65+ population. Their much higher propensity to work at older ages more than offsets both the continuing negative period trend and age-related decline, producing a net increase in aggregate LFP and thus the observed U-shape. Estimates from both the CCFEM and CCREM confirm the robustness of this interpretation. Our findings provide implications for the age-friendly employment policies.

Author

• Mengyu Liu, The Hong Kong Polytechnic University