IDEAS home Printed from
   My bibliography  Save this article

Chronic diseases and labour force participation in Australia


  • Zhang, Xiaohui
  • Zhao, Xueyan
  • Harris, Anthony


We examine the impact of several chronic diseases on the probability of labour force participation using data from the Australian National Health Surveys. An endogenous multivariate probit model is used to account for the potential endogeneity of the incidence of chronic conditions such as diabetes, cardiovascular diseases and mental illnesses. The cross-equation correlations are significant, rejecting the exogeneity of the chronic illnesses. Marginal effects of exogenous socio-demographic and lifestyle variables are estimated through their direct effects on labour market participation and indirect effects via the chronic diseases. The treatment effects of chronic diseases on labour force participation are estimated via conditional probabilities using five-dimensional normal distributions. The estimated effects differ by gender and age groups. Although computationally more demanding, these treatment effects are compared with results from a univariate model treating the chronic conditions exogenous and the structural effects from the multivariate probit model; both significantly overestimate the effects.

Suggested Citation

  • Zhang, Xiaohui & Zhao, Xueyan & Harris, Anthony, 2009. "Chronic diseases and labour force participation in Australia," Journal of Health Economics, Elsevier, vol. 28(1), pages 91-108, January.
  • Handle: RePEc:eee:jhecon:v:28:y:2009:i:1:p:91-108

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Elena Bastida & José A. Pagán, 2002. "The impact of diabetes on adult employment and earnings of Mexican Americans: Findings from a community based study," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 403-413.
    2. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416 Elsevier.
    3. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    4. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    5. Contoyannis, Paul & Jones, Andrew M., 2004. "Socio-economic status, health and lifestyle," Journal of Health Economics, Elsevier, vol. 23(5), pages 965-995, September.
    6. 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.
    7. Lixin Cai & Guyonne Kalb, 2006. "Health status and labour force participation: evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 241-261.
    8. Butterworth, Peter & Gill, Sarah C. & Rodgers, Bryan & Anstey, Kaarin J. & Villamil, Elena & Melzer, David, 2006. "Retirement and mental health: Analysis of the Australian national survey of mental health and well-being," Social Science & Medicine, Elsevier, vol. 62(5), pages 1179-1191, March.
    9. 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, vol. 6(2), pages 179-202, June.
    10. K. K. Lancaster, 2010. "A New Approach to Consumer Theory," Levine's Working Paper Archive 1385, David K. Levine.
    11. William H. Greene, 1998. "Gender Economics Courses in Liberal Arts Colleges: Further Results," The Journal of Economic Education, Taylor & Francis Journals, vol. 29(4), pages 291-300, January.
    12. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
    13. 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.
    14. Wilde, Joachim, 2000. "Identification of multiple equation probit models with endogenous dummy regressors," Economics Letters, Elsevier, vol. 69(3), pages 309-312, December.
    15. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    16. Anderson, Kathryn H. & Burkhauser, Richard V., 1984. "The importance of the measure of health in empirical estimates of the labor supply of older men," Economics Letters, Elsevier, vol. 16(3-4), pages 375-380.
    17. H. Shelton Brown & José A. Pagán & Elena Bastida, 2005. "The impact of diabetes on employment: genetic IVs in a bivariate probit," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 537-544.
    18. Li Mingliang & Tobias Justin L, 2006. "Bayesian Analysis of Structural Effects in an Ordered Equation System," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 10(4), pages 1-24, December.
    19. Campolieti, Michele, 2002. "Disability and the labor force participation of older men in Canada," Labour Economics, Elsevier, vol. 9(3), pages 405-432, July.
    20. Kathryn H. Anderson & Richard V. Burkhauser, 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 315-330.
    21. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
    22. Kahn, Matthew E, 1998. "Health and Labor Market Performance: The Case of Diabetes," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 878-899, October.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Abid A. Burki & Mushtaq A. Khan & Sobia Malik, 2015. "From Chronic Disease to Food Poverty: Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(1), pages 17-33.
    2. Thomas Barnay, 2016. "Health, work and working conditions: a review of the European economic literature," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(6), pages 693-709, July.
    3. Lee, Wang-Sheng & Guven, Cahit, 2013. "Engaging in corruption: The influence of cultural values and contagion effects at the microlevel," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 287-300.
    4. Seuring, Till & Goryakin, Yevgeniy & Suhrcke, Marc, 2015. "The impact of diabetes on employment in Mexico," Economics & Human Biology, Elsevier, vol. 18(C), pages 85-100.
    5. Johnston, David W. & Schurer, Stefanie & Shields, Michael A., 2011. "Evidence on the Long Shadow of Poor Mental Health across Three Generations," IZA Discussion Papers 6014, Institute for the Study of Labor (IZA).
    6. Joan Gil & Antonio Sicras-Mainar & Eugenio Zucchelli, 2016. "The effects of non-adherence on health care utilisation: panel data evidence on uncontrolled diabetes," Working Papers 2016-06, FEDEA.
    7. Till Seuring & Pieter Serneels & Marc Suhrcke, 2016. "The impact of diabetes on labour market outcomes in Mexico: a panel data and biomarker analysis," Working Papers 134cherp, Centre for Health Economics, University of York.
    8. Zucchelli, E. & Harris, M. & Zhao, X., 2012. "Ill-health and transitions to part-time work and self-employment among older workers," Health, Econometrics and Data Group (HEDG) Working Papers 12/04, HEDG, c/o Department of Economics, University of York.
    9. Jatrana, Santosh & Pasupuleti, Samba Siva Rao & Richardson, Ken, 2014. "Nativity, duration of residence and chronic health conditions in Australia: Do trends converge towards the native-born population?," Social Science & Medicine, Elsevier, vol. 119(C), pages 53-63.
    10. Patrick Laplagne & Maurice Glover & Anthony Shomos, 2007. "Effects of Health and Education on Labour Force Participation," Staff Working Papers 0704, Productivity Commission, Government of Australia.
    11. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo, 2016. "Health status and labor force participation: evidence for urban low and middle income individuals in Colombia," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 15(1), pages 33-55, April.
    12. Nick Drydakis, 2010. "Health impairments and labour market outcomes," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(5), pages 457-469, October.
    13. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo, 2015. "Estado de salud y participación laboral: Evidencia para Colombia," Borradores de Economia 851, Banco de la Republica de Colombia.
    14. Nils Braakmann, 2014. "The consequences of own and spousal disability on labor market outcomes and subjective well-being: evidence from Germany," Review of Economics of the Household, Springer, vol. 12(4), pages 717-736, December.
    15. Anthony Scott & Stefanie Schurer & Paul H. Jensen & Peter Sivey, 2009. "The effects of an incentive program on quality of care in diabetes management," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 1091-1108.
    16. Till Seuring & Olga Archangelidi & Marc Suhrcke, 2015. "The Economic Costs of Type 2 Diabetes: A Global Systematic Review," PharmacoEconomics, Springer, vol. 33(8), pages 811-831, August.
    17. Eric Delattre & Richard Moussa & Mareva Sabatier, 2015. "Health condition and job status interactions: Econometric evidence of causality from a French longitudinal survey," THEMA Working Papers 2015-19, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    18. Xavier Pautrel, 2009. "Health-enhancing activities and the environment:How competition for resources make the environmental policy beneficial," Working Papers hal-00423323, HAL.
    19. Evans-Lacko, Sara & Knapp, Martin & McCrone, Paul & Thornicroft, Graham & Mojtabai, Ramin, 2013. "The mental health consequences of the recession: economic hardship and employment of people with mental health problems in 27 European countries," LSE Research Online Documents on Economics 51632, London School of Economics and Political Science, LSE Library.
    20. Thomas Barnay & Eric Defebvre, 2016. "The influence of mental health on job retention," TEPP Working Paper 2016-06, TEPP.
    21. Harris, M.N. & Zhao, X. & Zucchelli, E., 2016. "The dynamics of health and labour market transitions at older ages: evidence from a multi-state model," Health, Econometrics and Data Group (HEDG) Working Papers 16/30, HEDG, c/o Department of Economics, University of York.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:28:y:2009:i:1:p:91-108. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.