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

Author

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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 endogeneity of self- reported health, particularly "justification bias", and (2) the relative importance of health changes and long-term health in the decision to work. The NPHS contains the HUI3, an "objective" health index which has been gaining popularity in empirical work. We contrast estimates of the impact of health on employment using self-assessed health, the HUI3, and a "purged" health measure similar to that employed by Bound et al. (1999) and Disney et al. (2003). A direct test suggests that self-assessed health suffers from justification bias. However, the HUI3 provides estimates that are similar to the "purged" health measure. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

Suggested Citation

  • Doreen Wing Han Au & Thomas F. Crossley & Martin Schellhorn, 2004. "The Effect of Health Changes and Long-term Health on the Work Activity of Older Canadians," Social and Economic Dimensions of an Aging Population Research Papers 119, McMaster University.
    • Handle: RePEc:mcm:sedapp:119
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    References listed on IDEAS

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    More about this item

    Keywords

    Health; Health Changes; Employment; Older Workers; NPHS;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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