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A sequential model for older workers’ labor transitions after a health shock

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  • Sergi Jiménez-Martín

    ()

  • José M. Labeaga
  • Cristina Vilaplana Prieto

Abstract

In this work we study older workers’ (50—64) labor force transitions after a health/disability shock. We find that the probability of keeping working decreases with both age and severity of the shock. Moreover, we find strong interactions between age and severity in the 50—64 age range and none in the 30–49 age range. Regarding demographics we find that being female and married reduce the probability of keeping work. On the contrary, being main breadwinner, education and skill levels increase it. Interestingly, the effect of some demographics changes its sign when we look at transitions from inactivity to work. This is the case of being married or having a working spouse. Undoubtedly, leisure complementarities should play a role in the latter case. Since the data we use contains a very detailed information on disabilities, we are able to evaluate the marginal effect of each type of disability either in the probability of keeping working or in returning back to work. Some of these results may have strong policy implications.

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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 898.

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Date of creation: Oct 2005
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Handle: RePEc:upf:upfgen:898

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Web page: http://www.econ.upf.edu/

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Keywords: Health shocks; disability; labor force transitions; older workers; Spain;

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References

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  1. Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999. "The dynamic effects of health on the labor force transitions of older workers," Labour Economics, Elsevier, Elsevier, vol. 6(2), pages 179-202, June.
  2. Jennifer Ward-Batts, 2001. "Health, Wealth and Gender: Do Health Shocks of Husbands and Wives Have Different Impacts on Household Wealth?," Working Papers, University of Michigan, Michigan Retirement Research Center wp016, University of Michigan, Michigan Retirement Research Center.
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  7. Hugo Benitez-Silva & Moshe Buchinsky & Hiu-Man Chan & John Rust & Sofia Sheivasser, 1997. "An Empirical Analysis of the Social Security Disability Application, Appeal, and Award Process," Public Economics, EconWPA 9712001, EconWPA, revised 16 Feb 1998.
  8. Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, Elsevier, vol. 18(2), pages 173-193, April.
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  11. Jonathan Gruber & Jeffrey D. Kubik, 1994. "Disability Insurance Rejection Rates and the Labor Supply of Older Workers," NBER Working Papers 4941, National Bureau of Economic Research, Inc.
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  13. Emile Tompa, 1999. "Transitions to Retirement: Determinants of Age of Social Security Take Up," Social and Economic Dimensions of an Aging Population Research Papers, McMaster University 6, McMaster University.
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  16. Derek Hum & Wayne Simpson, 1996. "Canadians with Disabilities and the Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(3), pages 287-299, September.
  17. 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.
  18. Michele Boldrin & Sergi Jimenez-Martni & Franco Peracchi, 1997. "Social Security and Retirement in Spain," NBER Working Papers 6136, National Bureau of Economic Research, Inc.
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  21. Roger Wilkins, 2004. "The Effects of Disability on Labour Force Status in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(4), pages 359-382, December.
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Cited by:
  1. Pilar Garc�a Gómez & Angel López Nicolás, 2006. "Health shocks, employment and income in the Spanish labour market," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 997-1009.
  2. Andrés J. Marchante Mera & Bienvenido Ortega Aguaza & José Sánchez Maldonado, 2006. "Las dimensiones del bienestar en las Comunidades Autónomas Españolas. Un análisis de Sigma y Gamma-Convergencia," Working Papers 2006-05, FEDEA.
  3. Pedro N. Rodríguez, & Simón Sosvilla-Rivero, 2006. "Understanding and Forecasting Stock Price Changes," Working Papers 2006-03, FEDEA.
  4. Sergi Jiménez Martín & Judit Vall Castello, 2009. "Business Cycle Effects on Labour Force Transitions for Older People in Spain," Working Papers 2009-25, FEDEA.

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