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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 to 64, and that this effect is underestimated by simple estimates based on self-assessed health. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

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File URL: http://socserv.mcmaster.ca/qsep/p/qsep397.pdf
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Paper provided by McMaster University in its series Quantitative Studies in Economics and Population Research Reports with number 397.

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Length: 46 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:mcm:qseprr:397
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  6. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
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  12. Baker, Michael & Benjamin, Dwayne, 1999. "Early Retirement Provisions and the Labor Force Behavior of Older Men: Evidence from Canada," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 724-56, October.
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