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The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey

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Author Info

  • Eugenio Zucchelli

    ()
    (The University of York)

  • Andrew M. Jones

    (The University of York)

  • Nigel Rice

    (The University of York)

  • Anthony Harris

    (Monash University)

Abstract

This paper analyses the relationship between ill-health, health shocks and early labour market exits among older working individuals. We represent the transition to non-employment as a discrete-time hazard model using a stock-sample from the first six waves (2001-2006) of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Our results show that health shocks are key determinants of early exit choices. For men, negative shocks to health increase the hazard of becoming nonemployed by 50 to 320 per cent, whereas for women, health shocks increase the hazard of an early exit from the labour market by 68 to 74 per cent. These findings are confirmed by both a measure of health limitations and a measure of latent health obtained using pooled ordered probit models as well as for two alternative definitions of health shocks.

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Bibliographic Info

Article provided by Bankwest Curtin Economics Centre (BCEC), Curtin Business School in its journal Australian Journal of Labour Economics (AJLE).

Volume (Year): 13 (2010)
Issue (Month): 2 ()
Pages: 191-218

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Handle: RePEc:ozl:journl:v:13:y:2010:i:2:p:191-218

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Postal: GPO Box U1987, Perth WA 6845
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Web page: http://business.curtin.edu.au/research/publications/journals/ajle/
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Related research

Keywords: Health: General Econometric and Statistical Methods and Methodology: General C41 Duration Analysis; Optimal Timing Strategies J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination;

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Cited by:
  1. Zucchelli, E.; & Harris, M.; & Zhao, X.;, 2012. "Ill-health and transitions to part-time work and self-employment among older workers," Health, Econometrics and Data Group (HEDG) Working Papers 12/04, HEDG, c/o Department of Economics, University of York.
  2. Sahlgren, Gabriel H., 2012. "Work ‘til You Drop: Short- and Longer-Term Health Effects of Retirement in Europe," Working Paper Series 928, Research Institute of Industrial Economics.
  3. Conley, Dalton & Thompson, Jason, 2013. "The effects of health and wealth shocks on retirement decisions," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 389-404.

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