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Elderly Health and Salaries in the Mexican Labor Market


  • Susan W. Parker


Little work exists on elderly health, work and salaries in developing countries. This paper aims to contribute to this literature in the areas of health and income of the elderly. The main purpose of this paper is to investigate the determinants of elderly health in the context of a developing country, Mexico,and the relationship between these health indicators and earnings in the labor market. We analyze the determinants of elderly health in Mexico, considering a number of different measures of health status, and we use these indicators to evaluate the impact of health on the income of working elderly individuals. We use the National Mexican Aging Survey of 1994, which contains detailed self-reported indicators of health as well as labor market information, to tease out these potential relationships. The results find that health measures have a strong negative effect on wages for male elderly workers. Our lowest point estimations demonstrate that poor health lowers hourly earnings by 58 percent. These are sizable effects, particularly within the context of a developing country, which does not have a universal social security system and may therefore imply that many elderly individuals work, whether or not their health level permits it. Poor health may also prevent others from working, and thereby contribute to high poverty rates among the elderly.

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  • Susan W. Parker, 1999. "Elderly Health and Salaries in the Mexican Labor Market," Research Department Publications 3051, Inter-American Development Bank, Research Department.
  • Handle: RePEc:idb:wpaper:3051

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    References listed on IDEAS

    1. Johnson, Richard W & Neumark, David, 1996. "Wage Declines among Older Men," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 740-748, November.
    2. Thomas, Duncan & Strauss, John, 1997. "Health and wages: Evidence on men and women in urban Brazil," Journal of Econometrics, Elsevier, vol. 77(1), pages 159-185, March.
    3. Peracchi, Franco & Welch, Finis, 1994. "Trends in Labor Force Transitions of Older Men and Women," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 210-242, April.
    4. Gruber, Jonathan & Madrian, Brigitte C, 1995. "Health-Insurance Availability and the Retirement Decision," American Economic Review, American Economic Association, vol. 85(4), pages 938-948, September.
    5. repec:aph:ajpbhl:1997:87:3:378-383_2 is not listed on IDEAS
    6. Jonathan Gruber & Jeffrey D. Kubik, 1994. "Disability Insurance Rejection Rates and the Labor Supply of Older Workers," NBER Working Papers 4941, National Bureau of Economic Research, Inc.
    7. Schultz, T. Paul & Tansel, Aysit, 1997. "Wage and labor supply effects of illness in Cote d'Ivoire and Ghana: instrumental variable estimates for days disabled," Journal of Development Economics, Elsevier, vol. 53(2), pages 251-286, August.
    8. Schultz, T. Paul, 1997. "Assessing the productive benefits of nutrition and health: An integrated human capital approach," Journal of Econometrics, Elsevier, vol. 77(1), pages 141-158, March.
    9. Behrman, Jere R., 1993. "The economic rationale for investing in nutrition in developing countries," World Development, Elsevier, vol. 21(11), pages 1749-1771, November.
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    11. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
    12. Costa, Dora L., 1996. "Health and Labor Force Participation of Older Men, 1900–1991," The Journal of Economic History, Cambridge University Press, vol. 56(01), pages 62-89, March.
    13. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    14. repec:aph:ajpbhl:1993:83:11:1527-1530_2 is not listed on IDEAS
    15. Posner, Richard A., 1995. "Aging and Old Age," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226675664.
    16. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
    17. John Strauss & Paul J. Gertler & Omar Rahman & Kristin Fox, 1993. "Gender and Life-Cycle Differentials in the Patterns and Determinants of Adult Health," Journal of Human Resources, University of Wisconsin Press, vol. 28(4), pages 791-837.
    18. Clark, Robert L & Anker, Richard, 1993. "Cross-national Analysis of Labor Force Participation of Older Men and Women," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 489-512, April.
    19. 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.
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    Cited by:

    1. Estelle James & Alejandra Cox Edwards & Rebeca Wong, 2012. "The Gender Impact of Pension Reform," World Bank Other Operational Studies 13046, The World Bank.
    2. William D. Savedoff & T. Paul Schultz, 2000. "Earnings and the Elusive Dividends of Health," Research Department Publications 3108, Inter-American Development Bank, Research Department.
    3. Elizabeth G. Katz & Maria C. Correia, 2001. "The Economics of Gender in Mexico : Work, Family, State, and Market," World Bank Publications, The World Bank, number 13907.
    4. Mayer, David, 2000. "On the Role of Health in the Economic and Demographic Dynamics of Brazil, 1980-1995," Arbetsrapport 2000:4, Institute for Futures Studies.

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