IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

The Effects of Health and Health Shocks on Hours Worked

  • Cai, Lixin


    (Melbourne Institute of Applied Economic and Social Research)

  • Mavromaras, Kostas G.


    (NILS, Flinders University)

  • Oguzoglu, Umut


    (University of Manitoba)

We investigate the impact of health on working hours in recognition of the fact that leaving the labour market due to persistently low levels of health stock or due to new health shocks, is only one of the possibilities open to employees. We use the first six waves of the HILDA survey to estimate the joint effect of health status and health shocks on working hours using a dynamic random effects Tobit model of working hours to account for zero working hours. We follow Heckman (1981) and approximate the unknown initial conditions with a static equation that utilizes information from the first wave of the data. Predicted individual health stocks are used to ameliorate the possible effects of measurement error and endogeneity. We conclude that overall lower health status results in lower working hours and that health shocks lead to further reductions in working hours when they occur. Estimation results show that the model performs well in separating the time-persistent effect of health stock (health status) and the potentially more transient health shocks on working hours.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3496.

in new window

Length: 24 pages
Date of creation: May 2008
Date of revision:
Publication status: published in: Health Economics, 2014, 23(5), 516-528
Handle: RePEc:iza:izadps:dp3496
Contact details of provider: Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page:

Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Haardt, David, 2006. "Transitions out of and back to employment among older men and women in the UK," ISER Working Paper Series 2006-20, Institute for Social and Economic Research.
  2. Nicole Watson & Mark Wooden, 2004. "The HILDA Survey Four Years On," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(3), pages 343-349, 09.
  3. Richard Disney & Carl Emmerson & Matthew Wakefield, 2003. "Ill health and retirement in Britain: a panel data based analysis," IFS Working Papers W03/02, Institute for Fiscal Studies.
  4. Umut Oguzoglu, 2007. "Dynamics of Work-Limitation and Work in Australia," Melbourne Institute Working Paper Series wp2007n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  5. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  6. Gerdtham, U. -G. & Johannesson, M. & Lundberg, L. & Isacson, D., 1999. "A note on validating Wagstaff and van Doorslaer's health measure in the analysis of inequalities in health," Journal of Health Economics, Elsevier, vol. 18(1), pages 117-124, January.
  7. 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.
  8. Mark Wooden & Robert Drago, 2007. "The Changing Distribution of Working Hours in Australia," Melbourne Institute Working Paper Series wp2007n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  9. Brenda Gannon & Brian Nolan, 2004. "Disability and Labour Force Participation in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 35(2), pages 135–155.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3496. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.