Health and Labor Force Participation of the Elderly in Europe: What do Objective Health Measures Add to the Analysis?
AbstractIn this paper, we study labour force participation behaviour of individuals aged 50-64 in 11 European countries.The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE).We examine the value added of objective health variables in relation to potentially endogenous self-reported health.We approach the endogeneity of self-reported health as an omitted variables problem.In line with the literature on the reliability of self-reported health, ambiguous results are obtained.In some countries, self-reported health does a fairly good job: controlling for extra health related variables does not seem to add much to the analysis.In other countries, however, self-reported health is clearly endogenous with results that are in line with the justi.cation hypothesis.They illustrate the multidimensional nature of health and the need to control for objective health variables when analyzing labour force participation behaviour.This makes an instrumental variables approach to deal with endogenous self-reported health less appropriate.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2006-87.
Date of creation: 2006
Date of revision:
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Web page: http://center.uvt.nl
SHARE; labour force participation; self-reported health; objective health; retirement;
Find related papers by JEL classification:
- I10 - Health, Education, and Welfare - - Health - - - General
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-30 (All new papers)
- NEP-EEC-2006-09-30 (European Economics)
- NEP-HEA-2006-09-30 (Health Economics)
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