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Health status and labour force participation: evidence from HILDA data

Author

Listed:
  • Guyonne Kalb
  • Lixin Cai

Abstract

This paper examines the effect of health on labour force participation using the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The potential endogeneity of health, especially self-assessed health, in the labour force participation equation is addressed by estimating the health equation and the labour force participation equation simultaneously. Taking into account the correlation between the error terms in the two equations, the estimation is conducted separately for males aged 15 to 49, males aged 50 to 64, females aged 15 to 49 and females aged 50 to 60. The results indicate that better health increases the probability of labour force participation for all four groups. However the effect is larger for the older groups and for women. As for the feedback effect, it is found that labour force participation has a significant positive impact on older females’ health, and a significant negative effect on younger males’ health. For younger females and older males, the impact of labour force participation on health is not significant. The null-hypothesis of exogeneity of health to labour force participation is rejected for all groups.

Suggested Citation

  • Guyonne Kalb & Lixin Cai, 2004. "Health status and labour force participation: evidence from HILDA data," Econometric Society 2004 Australasian Meetings 130, Econometric Society.
    • Handle: RePEc:ecm:ausm04:130
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    Cited by:

    1. Gail Pacheco & Dom Page & Don Webber, 2012. "Mental and physical health: reconceptualising the relationship with employment propensity," Working Papers 20121206, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    2. Deborah A. Cobb‐Clark & Steven Stillman, 2009. "The Retirement Expectations of Middle‐aged Australians," The Economic Record, The Economic Society of Australia, vol. 85(269), pages 146-163, June.
    3. Zamo-Akono, C. & Tsafack-Nanfosso, R., 2008. "Fécondité, Santé et Participation des femmes au Marché du Travail," MPRA Paper 10839, University Library of Munich, Germany.
    4. Callander, Emily Joy & Schofield, Deborah J. & Shrestha, Rupendra N., 2011. "Multi-dimensional poverty in Australia and the barriers ill health imposes on the employment of the disadvantaged," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 736-742.
    5. Cobb-Clark, Deborah A. & Stillman, Steven, 2006. "The Retirement Expectations of Middle-Aged Individuals," IZA Discussion Papers 2449, Institute of Labor Economics (IZA).
    6. Kulish Mariano & Kent Christopher & Smith Kathryn, 2010. "Aging, Retirement, and Savings: A General Equilibrium Analysis," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-32, July.
    7. Abdur Rauf & Maryyum Bashir & Kiran Asif & Sardar Fawad Saleem, 2018. "Impact of Health Expenditures on Labor Force Participation: Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 419-427, December.
    8. Janine Murphy, 2005. "Health promotion," Economic Roundup, The Treasury, Australian Government, issue 3, pages 13-38, September.
    9. Xiaoshu Han, 2006. "Medical Expenditure Puzzle," 2006 Meeting Papers 284, Society for Economic Dynamics.
    10. Rolle Remi Ahuru & Efegbere Henry Akpojubar, 2020. "The Effects Of Ill-Health And Disabilities On Labour Force Participation Among Nigerian Households," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 5(2), pages 8-19, September.
    11. Peter Butterworth & Timothy Crosier, 2004. "Mental Health Problems, disability and income support receipt: a replication and extension using the HILDA Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(2), pages 151-174, June.
    12. 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, March.
    13. James Enright & Grant M Scobie, 2010. "Healthy, Wealthy and Working: Retirement Decisions of Older New Zealanders," Treasury Working Paper Series 10/02, New Zealand Treasury.
    14. Lixin Cai & Guyonne Kalb, 2007. "Health status and labour force status of older working-age Australian men," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 227-252.

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    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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