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Measuring the effect of husband's health on wife's labor supply

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  • Michele J. Siegel

    (Albert Einstein College of Medicine, USA)

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    Abstract

    A sizable proportion of women remain married well into late life and an increasing proportion of them participate in the labor force. Since women tend to marry men older than themselves and men tend to experience serious illnesses at younger ages than women, women frequently witness declining health in their husbands. This is likely to affect a wife's labor-leisure trade-off in offsetting ways. Prior studies have not sought to disentangle the effect of a husband's poor health on his wife's reservation wage from the income effect of his ill health. We argue that, if we control for husband's earnings, the coefficient of husband's health in models of his wife's labor force participation (and hours of work) will reflect, in part, her preference over whether to decrease her labor supply to provide health care for her husband or whether to instead increase it to purchase this care in the market. However, husband's earnings are likely to be endogenous in these models due to unobserved characteristics common to husbands and wives. We find that the estimated effect of husband's health depends on whether we instrument for husband's earnings and on the health measure used. This is indicative of the importance of using a variety of health measures and controlling for husband's earnings, and their endogeneity, in future research on the effect of husband's health on wife's labor supply. Copyright © 2006 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.1084
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 15 (2006)
    Issue (Month): 6 ()
    Pages: 579-601

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    Handle: RePEc:wly:hlthec:v:15:y:2006:i:6:p:579-601

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
    2. William G. Johnson & Edward H & Murphy & Jr, 1975. "The response of low-income households to losses from disability," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 29(1), pages 85-96, October.
    3. Inman, Robert P, 1987. "The Economic Consequences of Debilitating Illness: The Case of Multiple Sclerosis," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 651-60, November.
    4. Tennille J. Checkovich & Steven Stern, 2002. "Shared Caregiving Responsibilities of Adult Siblings with Elderly Parents," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 441-478.
    5. Donald O. Parsons, 1976. "Health, Family Structure, and Labor Supply," NBER Working Papers 0132, National Bureau of Economic Research, Inc.
    6. John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998. "The Dynamic Effects of Health on the Labor Force Transitions of Older Workers," NBER Working Papers 6777, National Bureau of Economic Research, Inc.
    7. Debra Sabatini Dwyer & Olivia S. Mitchell, 1998. "Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?," NBER Working Papers 6503, National Bureau of Economic Research, Inc.
    8. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
    9. Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
    10. Butler, J S, et al, 1987. "Measurement Error in Self-reported Health Variables," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 644-50, November.
    11. Haurin, Donald R, 1989. "Women's Labor Market Reactions to Family Disruptions," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 54-61, February.
    12. Gloria J. Bazzoli, 1985. "The Early Retirement Decision: New Empirical Evidence on the Influence of Health," Journal of Human Resources, University of Wisconsin Press, vol. 20(2), pages 214-234.
    13. Berger, Mark C. & Fleisher, Belton M., 1984. "Husband's health and wife's labor supply," Journal of Health Economics, Elsevier, vol. 3(1), pages 63-75, April.
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    Cited by:
    1. Bjørnskov, Christian & Dreher, Axel & Fischer, Justina AV, 2007. "On Gender Inequality and Life Satisfaction: Does Discrimination Matter?," Working Paper Series in Economics and Finance 657, Stockholm School of Economics.
    2. Pilar Garcia-Gomez & Hans van Kippersluis & Owen O'Donnell & Eddy van Doorslaer, 2011. "Effects of Health on Own and Spousal Employment and Income using Acute Hospital Admissions," Tinbergen Institute Discussion Papers 11-143/2, Tinbergen Institute.
    3. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.

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