Health Status and Labour Force Participation: Evidence from the HILDA Data
AbstractAlthough the overseas literature on the effect of health on labour force participation is extensive, especially in the US, the literature in an Australian context is scarce. This paper contributes to the understanding of this issue using the recently released Household, Income and Labour Dynamics in Australia (HILDA) Survey data. The potential endogeneity of the health variables, especially self-assessed health, in the labour force participation equation is addressed by estimating the health equation and the labour force participation equation simultaneously. We also take into account the correlation between the error terms in the two equations to obtain an efficient result. The null-hypothesis of exogeneity of health to labour force participation is tested based on a test of the joint significance of the labour force participation variable in the health equation and the correlation coefficient of the two error terms.
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Bibliographic InfoPaper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2004n04.
Length: 43 pages
Date of creation: Mar 2004
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-30 (All new papers)
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