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

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Author Info
Doreen Wing Han Au
Thomas F. Crossley
Martin Schellhorn

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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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Publisher Info
Paper provided by McMaster University in its series Social and Economic Dimensions of an Aging Population Research Papers with number 134.

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Length: 45 pages
Date of creation: Oct 2005
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Handle: RePEc:mcm:sedapp:134

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

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Find related papers by JEL classification:
I12 - Health, Education, and Welfare - - Health - - - Health Production
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Michael Baker & Jonathan Gruber & Kevin Milligan, 2001. "The Retirement Incentive Effects of Canada's Income Security Programs," NBER Working Papers 8658, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier. [Downloadable!] (restricted)
  3. Baker, Michael & Benjamin, Dwayne, 1999. "Early Retirement Provisions and the Labor Force Behavior of Older Men: Evidence from Canada," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 724-56, October. [Downloadable!] (restricted)
  4. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
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  5. Maarten Lindeboom & Marcel Kerkhofs, 2002. "Health and Work of the Elderly," Tinbergen Institute Discussion Papers 02-025/3, Tinbergen Institute. [Downloadable!]
  6. Emile Tompa, 1999. "Transitions to Retirement: Determinants of Age of Social Security Take Up," Social and Economic Dimensions of an Aging Population Research Papers 6, McMaster University. [Downloadable!]
  7. Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, vol. 18(2), pages 173-193, April. [Downloadable!] (restricted)
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  8. Hugo Benítez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2004. "How large is the bias in self-reported disability?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 649-670. [Downloadable!]
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  11. Disney, Richard & Emmerson, Carl & Wakefield, Matthew, 2006. "Ill health and retirement in Britain: A panel data-based analysis," Journal of Health Economics, Elsevier, vol. 25(4), pages 621-649, July. [Downloadable!] (restricted)
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  12. Michael Baker & Mark Stabile & Catherine Deri, 2001. "What do Self-Reported, Objective, Measures of Health Measure?," NBER Working Papers 8419, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Verbeek, Marno & Nijman, Theo, 1992. "Testing for Selectivity Bias in Panel Data Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 681-703, August. [Downloadable!] (restricted)
    Other versions:
  14. Jonathan Gruber, 1997. "Social Security and Retirement in Canada," NBER Working Papers 6308, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Doorslaer, Eddy van & Jones, Andrew M., 2003. "Inequalities in self-reported health: validation of a new approach to measurement," Journal of Health Economics, Elsevier, vol. 22(1), pages 61-87, January. [Downloadable!] (restricted)
  16. Kreider, Brent, 2002. "Latent Work Disability and Reporting Bias," Staff General Research Papers 5185, Iowa State University, Department of Economics.
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  18. Campolieti, Michele, 2002. "Disability and the labor force participation of older men in Canada," Labour Economics, Elsevier, vol. 9(3), pages 405-432, July. [Downloadable!] (restricted)
  19. Kathleen McGarry, 2002. "Health and Retirement: Do Changes in Health Affect Retirement Expectations?," NBER Working Papers 9317, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Maki, Dennis R, 1993. "The Economic Implications of Disability Insurance in Canada," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages S148-69, January. [Downloadable!] (restricted)
  21. Kerkhofs, Marcel & Lindeboom, Maarten & Theeuwes, Jules, 1999. "Retirement, financial incentives and health," Labour Economics, Elsevier, vol. 6(2), pages 203-227, June. [Downloadable!] (restricted)
  22. Hugo Benitez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2000. "How Large is the Bias in Self-Reported Disability?," Working Papers 2000-01, Brown University, Department of Economics.
    Other versions:
  23. Baker, Michael & Benjamin, Dwayne, 1999. "How do retirement tests affect the labour supply of older men?," Journal of Public Economics, Elsevier, vol. 71(1), pages 27-51, January. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics. [Downloadable!]
  2. Brenda Gannon, 2005. "A dynamic analysis of disability and labour force participation in Ireland 1995-2000," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 925-938. [Downloadable!]
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This page was last updated on 2009-11-24.

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