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Elderly Health and Salaries in the Mexican Labor Market

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  • Susan W. Parker

Abstract

Little work exists on elderly health, work and salaries in developing countries. This paper aims to contribute to this literature in the areas of health and income of the elderly. The main purpose of this paper is to investigate the determinants of elderly health in the context of a developing country, Mexico,and the relationship between these health indicators and earnings in the labor market. We analyze the determinants of elderly health in Mexico, considering a number of different measures of health status, and we use these indicators to evaluate the impact of health on the income of working elderly individuals. We use the National Mexican Aging Survey of 1994, which contains detailed self-reported indicators of health as well as labor market information, to tease out these potential relationships. The results find that health measures have a strong negative effect on wages for male elderly workers. Our lowest point estimations demonstrate that poor health lowers hourly earnings by 58 percent. These are sizable effects, particularly within the context of a developing country, which does not have a universal social security system and may therefore imply that many elderly individuals work, whether or not their health level permits it. Poor health may also prevent others from working, and thereby contribute to high poverty rates among the elderly.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 3051.

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Date of creation: Jan 1999
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Handle: RePEc:idb:wpaper:3051

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  1. Schultz, T. Paul & Tansel, Aysit, 1997. "Wage and labor supply effects of illness in Cote d'Ivoire and Ghana: instrumental variable estimates for days disabled," Journal of Development Economics, Elsevier, vol. 53(2), pages 251-286, August.
  2. Johnson, Richard W & Neumark, David, 1996. "Wage Declines among Older Men," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 740-48, November.
  3. Jonathan Gruber & Jeffrey D. Kubik, 1994. "Disability Insurance Rejection Rates and the Labor Supply of Older Workers," NBER Working Papers 4941, National Bureau of Economic Research, Inc.
  4. Schultz, T. Paul, 1997. "Assessing the productive benefits of nutrition and health: An integrated human capital approach," Journal of Econometrics, Elsevier, vol. 77(1), pages 141-158, March.
  5. Thomas, D. & Strauss, J., 1997. "Health and Wages: Evidence on Men and Women in Urban Brazil," Papers 97-05, RAND - Reprint Series.
  6. Clark, Robert L & Anker, Richard, 1993. "Cross-national Analysis of Labor Force Participation of Older Men and Women," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 489-512, April.
  7. Gruber, Jonathan & Madrian, Brigitte C, 1995. "Health-Insurance Availability and the Retirement Decision," American Economic Review, American Economic Association, vol. 85(4), pages 938-48, September.
  8. Dora L. Costa, 1996. "Health and Labor Force Participation of Older Men, 1900-1991," NBER Working Papers 4929, National Bureau of Economic Research, Inc.
  9. Kathryn H. Anderson & Richard V. Burkhauser, 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 315-330.
  10. Behrman, Jere R., 1993. "The economic rationale for investing in nutrition in developing countries," World Development, Elsevier, vol. 21(11), pages 1749-1771, November.
  11. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
  12. Peracchi, Franco & Welch, Finis, 1994. "Trends in Labor Force Transitions of Older Men and Women," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 210-42, April.
  13. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
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Cited by:
  1. Estelle James & Alejandra Cox Edwards & Rebeca Wong, 2012. "The Gender Impact of Pension Reform," World Bank Other Operational Studies 13046, The World Bank.
  2. Mayer, David, 2000. "On the Role of Health in the Economic and Demographic Dynamics of Brazil, 1980-1995," Arbetsrapport 2000:4, Institute for Futures Studies.
  3. Elizabeth G. Katz & Maria C. Correia, 2001. "The Economics of Gender in Mexico : Work, Family, State, and Market," World Bank Publications, The World Bank, number 13907, October.
  4. William D. Savedoff & T. Paul Schultz, 2000. "Earnings and the Elusive Dividends of Health," Research Department Publications 3108, Inter-American Development Bank, Research Department.

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