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Health status and labour force participation: evidence from HILDA data

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Author Info
Guyonne Kalb
Lixin Cai

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Abstract

This paper examines the effect of health on labour force participation using the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The potential endogeneity of health, especially self-assessed health, in the labour force participation equation is addressed by estimating the health equation and the labour force participation equation simultaneously. Taking into account the correlation between the error terms in the two equations, the estimation is conducted separately for males aged 15 to 49, males aged 50 to 64, females aged 15 to 49 and females aged 50 to 60. The results indicate that better health increases the probability of labour force participation for all four groups. However the effect is larger for the older groups and for women. As for the feedback effect, it is found that labour force participation has a significant positive impact on older females’ health, and a significant negative effect on younger males’ health. For younger females and older males, the impact of labour force participation on health is not significant. The null-hypothesis of exogeneity of health to labour force participation is rejected for all groups.

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Publisher Info
Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 130.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:ausm04:130

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Related research
Keywords: Self-reported health; labour force participation; endogeneity of health; simultaneous equation model;

Find related papers by JEL classification:
I12 - Health, Education, and Welfare - - Health - - - Health Production

Cited by:
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  1. Zamo-Akono, C. & Tsafack-Nanfosso, R., 2008. "Fécondité, Santé et Participation des femmes au Marché du Travail
    [Fertility, health and female labour force participation: there is a missing link!]    ," MPRA Paper 10839, University Library of Munich, Germany. [Downloadable!]
  2. Deborah A. Cobb-Clark & Steve Stillman, 2006. "The Retirement Expectations of Middle-Aged Individuals," CEPR Discussion Papers 540, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
    Other versions:
  3. Lixin Cai & Guyonne Kalb, 2006. "Health status and labour force participation: evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 241-261. [Downloadable!]
  4. Lixin Cai & Guyonne Kalb, 2005. "Health Status and Labour Force Status of Older Working-Age Australian Men," Melbourne Institute Working Paper Series wp2005n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
    Other versions:
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