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The Effect of Health Changes and Long-term Health on the Work Activity of Older Canadians

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  • Doreen Wing Han Au
  • Thomas F. Crossley
  • Martin Schellhorn

Abstract

Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible problems with self- reported health, including endogeneity and measurement error, and (2) the relative importance of health changes and long-term health in the decision to work. We contrast estimates of the impact of health on employment using self-assessed health, an objective health index contained in the NPHS - the HUI3, and a "purged" health stock measure. Our results suggest that health has an economically significant effect on employment probabilities for Canadian men and women aged 50 to 64, and that this effect is underestimated by simple estimates based on self-assessed health. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

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Bibliographic Info

Paper provided by McMaster University in its series Quantitative Studies in Economics and Population Research Reports with number 397.

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Length: 46 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:mcm:qseprr:397

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Keywords: health; health changes; employment; older workers;

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