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Health and work of the elderly: subjective health measures, reporting errors and endogeneity in the relationship between health and work

  • Maarten Lindeboom

    (VU University, Amsterdam, The Netherlands; HEB, Bergen, Norway; Tinbergen Institute, Amsterdam, The Netherlands; IZA, Bonn, Germany; and Netspar, Tilburg, The Netherlands)

  • Marcel Kerkhofs

    (OSA Institute for Labor Studies, Tilburg University, The Netherlands)

This paper explores the interrelation between health and work decisions of older workers. For this, two issues are of relevance. Firstly, health and work may be endogenously related because of direct causal effects of health on work and vice versa, and because of unobservables that may affect both observed health and work outcomes. Secondly, social surveys usually contain self-assessed health measures and research indicates that these may be subject to endogenous, state-dependent reporting bias. A solution to the 'Health and Retirement Nexus' therefore requires an integrated model for work decisions, health production and health reporting mechanisms. We formulate such a model and estimate it on a longitudinal dataset of older Dutch males. Copyright © 2009 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 24 (2009)
Issue (Month): 6 ()
Pages: 1024-1046

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Handle: RePEc:jae:japmet:v:24:y:2009:i:6:p:1024-1046
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  1. Sickles, Robin C & Yazbeck, Abdo, 1998. "On the Dynamics of Demand for Leisure and the Production of Health," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(2), pages 187-97, April.
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  3. Doreen Wing Han Au & Thomas F. Crossley & Martin Schellhorn, 2005. "The Effect of Health Changes and Long-term Health on the Work Activity of Older Canadians," Quantitative Studies in Economics and Population Research Reports 397, McMaster University.
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  9. Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-80, September.
  10. Arie Kapteyn & Klaas de Vos, 1997. "Social Security and Retirement in The Netherlands," NBER Working Papers 6135, National Bureau of Economic Research, Inc.
  11. 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.
  12. 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 223-55, March-Apr.
  13. Gruber, Jonathan & Wise, David, 1998. "Social Security and Retirement: An International Comparison," American Economic Review, American Economic Association, vol. 88(2), pages 158-63, May.
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