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The effect of health changes and long-term health on the work activity of older Canadians

  • Doreen Wing Han Au
  • Thomas F. Crossley
  • Martin Schellhorn

Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible problems with self-reported health, including endogeneity and measurement error, and (2) the relative importance of health changes and long-term health in the decision to work. We contrast estimates of the impact of health on employment using self-assessed health, an objective health index contained in the NPHS - the HUI3, and a 'purged' health stock measure. Our results suggest that health has an economically significant effect on employment probabilities for Canadian men and women aged 50-64, and that this effect is underestimated by simple estimates based on self-assessed health. We also corroborate recent US and UK findings that changes in health are important in the work decision. Copyright © 2005 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1051
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 14 (2005)
Issue (Month): 10 ()
Pages: 999-1018

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Handle: RePEc:wly:hlthec:v:14:y:2005:i:10:p:999-1018
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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