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Health and Work of the Elderly: Subjective Health Measures, Reporting Errors and the Endogenous Relationship between Health and Work

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Author Info

  • Lindeboom, Maarten

    ()
    (VU University Amsterdam)

  • Kerkhofs, Marcel

    ()
    (Tilburg University)

Abstract

This paper aims to explore the interrelation between health and work decisions of elderly workers, taking the various ways in which health and work can influence each other explicitly into account. For this, two issues are of relevance. Self-assessed health measures are usually at hand in empirical analyses and research indicates that these may be endogenous, state dependent, reporting behaviour. Furthermore, even if an objective health measure is used, it is not likely to be strictly exogenous to labour market status or labour income. Health and labour market variables are correlated because of unobserved individual-specific characteristics (e.g., investments in human capital and health capital) Moreover, one’s labour market status is expected to have a (reverse) causal effect on health. A solution to the ‘Health and Retirement Nexus’ requires an integrated model for work decisions, health production and health reporting mechanisms. We formulate such a model and estimate it on a longitudinal dataset of Dutch elderly.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 457.

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Length: 44 pages
Date of creation: Mar 2002
Date of revision:
Handle: RePEc:iza:izadps:dp457

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Keywords: retirement; endogeneity; state dependent reporting errors; health;

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  1. 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.
  2. 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.
  3. 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.
  4. Marcel Kerkhofs & Maarten Lindeboom, 1997. "Age related health dynamics and changes in labour market status," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 407-423.
  5. Richard V. Burkhauser, 1979. "The Pension Acceptance Decision of Older Workers," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 63-75.
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Cited by:
  1. Deschryvere, Matthias, 2004. "Labour Force Behavior of Elderly Two Adult Households: Evidence from EU-countries," Discussion Papers 933, The Research Institute of the Finnish Economy.
  2. Deschryvere, Matthias, 2004. "Health and Retirement. An Update of the Literature," Discussion Papers 932, The Research Institute of the Finnish Economy.

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