Employed and Happy despite Weak Health? Labour Market Participation and Job Quality of Older Workers with Disabilities

European countries with high senior employment rates have the highest levels of job satisfaction despite an older and more physically limited workforce. In this paper, we argue that this paradox can be explained by heterogeneous levels of job quality: better working conditions may enable older workers with disabilities to remain satisfied and employed. Using panel data from the Survey of Health, Ageing and Retirement in Europe, we find that health status, job satisfaction, but also working conditions, are major individual determinants of early labour market exits. We also show that high intrinsic and extrinsic rewards can mitigate the selective effects of disability. Finally,the comparative analysis reveals that older workers with disabilities are more likely to be employed in countries where they receive higher rewards. The findings therefore indicate that improved job quality is a major factor of successful active ageing strategies.