Version 1
: Received: 2 February 2024 / Approved: 5 February 2024 / Online: 5 February 2024 (03:43:21 CET)
How to cite:
Ramli, S.F.; Ismail, N.; Isa, Z.; Roslan, N.F.; Ab Razak, R.; Aminuddin Jafry, N.H. Labor Force Participation Rate and Expected Length of Retirement 2001-2047: A Case Study in Malaysia. Preprints2024, 2024020203. https://doi.org/10.20944/preprints202402.0203.v1
Ramli, S.F.; Ismail, N.; Isa, Z.; Roslan, N.F.; Ab Razak, R.; Aminuddin Jafry, N.H. Labor Force Participation Rate and Expected Length of Retirement 2001-2047: A Case Study in Malaysia. Preprints 2024, 2024020203. https://doi.org/10.20944/preprints202402.0203.v1
Ramli, S.F.; Ismail, N.; Isa, Z.; Roslan, N.F.; Ab Razak, R.; Aminuddin Jafry, N.H. Labor Force Participation Rate and Expected Length of Retirement 2001-2047: A Case Study in Malaysia. Preprints2024, 2024020203. https://doi.org/10.20944/preprints202402.0203.v1
APA Style
Ramli, S.F., Ismail, N., Isa, Z., Roslan, N.F., Ab Razak, R., & Aminuddin Jafry, N.H. (2024). Labor Force Participation Rate and Expected Length of Retirement 2001-2047: A Case Study in Malaysia. Preprints. https://doi.org/10.20944/preprints202402.0203.v1
Chicago/Turabian Style
Ramli, S.F., Ruzanna Ab Razak and Nurul Hanis Aminuddin Jafry. 2024 "Labor Force Participation Rate and Expected Length of Retirement 2001-2047: A Case Study in Malaysia" Preprints. https://doi.org/10.20944/preprints202402.0203.v1
Abstract
The ageing global population and changing labor force participation are having a profound impact on state pension programs worldwide, including Malaysia. However, the effects of an ageing workforce and declining fertility rates are having a significant impact on future trends in labor force participation and the duration of retirement. This paper presents an innovative examination of labor force participation rate (LFPR) forecasting within the context of an aging workforce, utilizing the Lee-Carter and Cairns-Blake Dowd stochastic models, traditionally applied to mortality data. By adapting these models to LFPR data, the study offers a novel perspective on predicting workforce participation trends and understanding the dynamics of retirement planning from year 2001 to 2047. Additionally, by incorporating the mortality forecasts from the United Nations, the research navigates through the complexities of applying actuarial methods to labor economics, revealing differentiated pathways for male and female participation in the labor market and the anticipated length of retirement. This study offers a unique comparison between the Lee-Carter and the Cairns-Blake-Dowd (CBD) LFPR models. It focuses on fitting and forecasting the LFPR of senior employees aged 50 to 64. The results highlighted discrepancies among models that demonstrated evidence of model risk for extended retirement duration.
Keywords
longevity; workforce; stochastic model; labor force participation; retirement; forecasts
Subject
Social Sciences, Demography
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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