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The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey

Author

Listed:
  • Eugenio Zucchelli

    (The University of York)

  • Andrew M. Jones

    (The University of York)

  • Nigel Rice

    (The University of York)

  • Anthony Harris

    (Monash University)

Abstract

This paper analyses the relationship between ill-health, health shocks and early labour market exits among older working individuals. We represent the transition to non-employment as a discrete-time hazard model using a stock-sample from the first six waves (2001-2006) of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Our results show that health shocks are key determinants of early exit choices. For men, negative shocks to health increase the hazard of becoming non-employed by 50 to 320 per cent, whereas for women, health shocks increase the hazard of an early exit from the labour market by 68 to 74 per cent. These findings are confirmed by both a measure of health limitations and a measure of latent health obtained using pooled ordered probit models as well as for two alternative definitions of health shocks.

Suggested Citation

  • Eugenio Zucchelli & Andrew M. Jones & Nigel Rice & Anthony Harris, 2010. "The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(2), pages 191-218.
    • Handle: RePEc:ozl:journl:v:13:y:2010:i:2:p:191-218
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Health: General; Econometric and Statistical Methods and Methodology: General; Duration Analysis; Optimal Timing Strategies; Economics of the Elderly; Economics of the Handicapped; Non-labour Market Discrimination;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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