PROJECT SUMMARY Work capacity is a measure of health expressed in relation to the functional demands of the work environment. Specifically, it is the capacity to perform a job or set of jobs, and represents the interaction between an individual’s cognitive, physical, psychomotor, and sensory abilities and the demands of the job. However, in existing data, individuals’ health-related functional abilities are not measured in a way that permits direct comparison to the functional demands of occupations. The goal of the proposed research is to investigate how functional abilities increase and limit work capacity, how these effects interact with human capital acquired earlier in life, and how opportunities for people with different functional ability profiles and skills vary across local areas and industries, shaping their prospects for independence and healthy aging. We will first develop a new conceptual framework for assessing health-related work capacity which integrates measurement of cognitive, physical, psychomotor, and sensory abilities with the measurement of occupational ability requirements. Based on this framework, we will design two surveys that will enable us to assess functional abilities and skills on the same scale and in the same way in which the ability and skill requirements of occupations in the national economy are measured. The surveys will be fielded to a nationally representative sample of individuals regardless of their current work status. We will use the new data to integrate functional abilities and skills with federal data on occupational requirements to produce individualized estimates of work capacity. We will analyze how the new measures of health-related work capacity vary by age, how they differ across demographic groups, and how they are potentially constrained by functional decline in abilities, skill limitations, and lack of occupational opportunities in local areas and across industries.