Using a highly stylized dynamic microsimulation model, we project the labor force of the United States up to the year 2060
and contrast these projections with projections for Germany to assess differential effects on outcomes. The projections are
consistent with the US Census Bureau's and Eurostat's demographic projections. Our modeling approach allows to show and quantify
how policy changes the future size of the labor force, which we assess with a series of what-if scenarios. Both the USA and
Germany are expected to undergo demographic aging, but their demographic fundamentals differ starkly. This has strong implications
for their labor force developments. According to our microsimulation, the US labor force will, despite population aging, increase
by 16.2 percent in the age groups 15 to 74 (corresponding to 25.2 million workers) between 2020 and 2060, while Germany will
experience a decline by 10.7 percent (4.4 million workers). In these baseline projections, improvements in the education structure
will add about two million persons to the US labor force and about half a million persons to the German labor force by 2060.
In the what-if scenarios, we examine the implications of improvements in the educational structure of the population and of
policies which address the health impediments for labor force participation. Of the educational scenarios that we evaluate,
increasing the number of persons who achieve more than lower education has the strongest positive impact on labor force participation,
relative to the number of additional years of schooling implied by the various scenarios. Shifting people from intermediate
to higher education levels also increases labor force participation in higher age groups, however, this is partially offset
by lock in effects at younger ages. Our projections highlight that improvements in the labor market integration of people
with health limitations provide a particularly promising avenue to increase labor force participation rates and thus help
to address the challenges posed by demographic aging. If the health gap in participation rates in the United States were similar
to that currently observed in Sweden, the labor force in 2060 would be larger by about 14.9 million persons.
We analyse the effect of income on mortality in Austria by using administrative social security data. To tackle potential
endogeneity concerns arising in this context, we estimate time invariant firm-specific wage components and use them as instruments
for actual wages. Although we find quantitatively small yet statistically significant effects in our naive least squares estimations,
instrumental variables regressions reveal a robust zero effect of income on 10-year death rates for workers aged 40 to 60
years, both in terms of coefficient magnitude and narrow width of confidence intervals. These results are robust to various
sample specifications and both linear and non-linear estimation methods.