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Health and transitions into nonemployment and early retirement among older workers in Canada

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  • Chen, Wen-Hao

Abstract

Extending working lives is considered a viable solution to fiscal and macroeconomic challenges related to population ageing. Opportunities for sustained employment, however, are not experienced equally among older population, particularly among those with a health problem. This study aims to examine the longer-term effect of health on employment trajectories in later part of working life using a unique survey-administrative linked dataset for Canada. Specifically, we apply competing-risks models to analyze whether different aspects of health conditions at baseline predict subsequent exit routes, including nonemployment and early retirement. The nonparametric findings of the paper show that only about 33% of workers aged 50–62 with a health problem at baseline remained employed at age 64, compared to 55% of healthy workers. Exiting into nonemployment seemed more common among leavers with activity limitations, while early retirement was more likely among healthy leavers. These results are robust even when individuals’ preferences for work and financial factors were controlled for. Moreover, we identify differential impacts of specific chronic diseases on early work exit. Not all symptoms affect employment transitions to a similar extent. Older workers who reported the comorbidity of mental and musculoskeletal disorders faced an increased risk of nonemployment, while the presence of diabetes and cardiovascular problems at baseline were more predictive of early retirement.

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  • Chen, Wen-Hao, 2019. "Health and transitions into nonemployment and early retirement among older workers in Canada," Economics & Human Biology, Elsevier, vol. 35(C), pages 193-206.
  • Handle: RePEc:eee:ehbiol:v:35:y:2019:i:c:p:193-206
    DOI: 10.1016/j.ehb.2019.06.001
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    References listed on IDEAS

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    Cited by:

    1. Anita Abramowska-Kmon & Wojciech Łątkowski, 2021. "The Impact of Retirement on Happiness and Loneliness in Poland—Evidence from Panel Data," IJERPH, MDPI, vol. 18(18), pages 1-15, September.
    2. Lisa Harber-Aschan & Wen-Hao Chen & Ashley McAllister & Natasja Koitzsch Jensen & Karsten Thielen & Ingelise Andersen & Finn Diderichsen & Ben Barr & Bo Burström, 2020. "The impact of longstanding illness and common mental disorder on competing employment exits routes in older working age: A longitudinal data-linkage study in Sweden," PLOS ONE, Public Library of Science, vol. 15(2), pages 1-16, February.

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    More about this item

    Keywords

    Canada health inequalities; Older workers; Competing-Risks;
    All these keywords.

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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