Micro Determinants of Labor Force Status Among Older Americans

This paper uses the first three waves of the Health and Retirement Survey (HRS) to investigate the determinants of labor force status among older Americans. Using transitions at two-year intervals we find that after being retired or unemployed, those who are actively searching for a job have a higher probability of returning to work. We also find that being in good physical and mental health--measured by objective and subjective variables--increases the chances of becoming employed, as does having worked in the last twelve months. Those who are receiving disability payments are less likely to make this transition. If we focus on those who are married, we find a preference for joint leisure through the influence of the labor force status, health and age of the respondent's partner on the transition decisions. We investigate transitions in and out of employment and self-employment, and for subsamples of males and females. Using monthly employment dummies for the period 1989-97, we analyze monthly, quarterly, semi-annual and annual transitions and find that most of our conclusions are independent of the periodicity but that the effects of the variables vary across specifications.