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Health and Labor Supply Dynamics of Older Married Workers

  • Danilo Cavapozzi

    ()

    (University of Padova)

This empirical analysis investigates how the labor supply dynamics of married workers aged 46-65 is influenced by their own health conditions and by those of their cohabiting partners. Exploiting the information conveyed by the European Community Household Panel (1995-2001), our econometric specifications focus on the transition towards not employment within the next year and use alternative health indicators to describe the overall physical and mental conditions of couple members. We also control for partners labor supply because of its close relationship with their own health and the well-documented coordination with the labor market position of the other couple member. Our results show that while healthier individuals present higher chances of remaining at work in the future, living with healthier spouses affects positively the likelihood of ceasing from work. Finally, when the spouse is employed, the probability of keeping on working is estimated to rise. This last result upholds the hypothesis, suggested by the literature, that couple members prefer to spend their time in the same employment status.

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Paper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0073.

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Length: 39 pages
Date of creation: Mar 2008
Date of revision:
Handle: RePEc:pad:wpaper:0073
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  1. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416 Elsevier.
  2. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  3. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  4. Thomas C. Buchmueller & Robert G. Valletta, 1996. "The effect of health insurance on married female labor supply," Working Papers in Applied Economic Theory 96-09, Federal Reserve Bank of San Francisco.
  5. Ronald Hagan & Andrew M. Jones & Nigel Rice, 2006. "Health and retirement in Europe," Health, Econometrics and Data Group (HEDG) Working Papers 06/10, HEDG, c/o Department of Economics, University of York.
  6. Blau, David M, 1998. "Labor Force Dynamics of Older Married Couples," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 595-629, July.
  7. Jiménez-Martín, Sergi & Labeaga, José M. & Martínez Granado, Maite, 1999. "Health status and retirement decisions for older European couples," IRISS Working Paper Series 1999-01, IRISS at CEPS/INSTEAD.
  8. Nigel Rice & Jennifer Roberts & Andrew M. Jones, 2006. "Sick of work or too sick to work? Evidence on health shocks and early retirement from the BHPS," Health, Econometrics and Data Group (HEDG) Working Papers 06/13, HEDG, c/o Department of Economics, University of York.
  9. Blau, David M. & Riphahn, Regina T., 1999. "Labor force transitions of older married couples in Germany," Labour Economics, Elsevier, vol. 6(2), pages 229-252, June.
  10. Michaud, P.C., 2003. "Joint Labour Supply Dynamics of Older Couples," Discussion Paper 2003-69, Tilburg University, Center for Economic Research.
  11. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
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  13. Eugenio Zucchelli & Anthony Harris & Nigel Rice & Andrew M. Jones, 2007. "Health and Retirement among Older Workers," Health, Econometrics and Data Group (HEDG) Working Papers 07/19, HEDG, c/o Department of Economics, University of York.
  14. Berkowitz, Michael K. & Qiu, Jiaping, 2006. "A further look at household portfolio choice and health status," Journal of Banking & Finance, Elsevier, vol. 30(4), pages 1201-1217, April.
  15. Harvey S. Rosen & Stephen Wu, 2003. "Portfolio Choice and Health Status," NBER Working Papers 9453, National Bureau of Economic Research, Inc.
  16. Blau, David M, 1994. "Labor Force Dynamics of Older Men," Econometrica, Econometric Society, vol. 62(1), pages 117-56, January.
  17. Disney, Richard & Emmerson, Carl & Wakefield, Matthew, 2006. "Ill health and retirement in Britain: A panel data-based analysis," Journal of Health Economics, Elsevier, vol. 25(4), pages 621-649, July.
  18. Chou, Y. J. & Staiger, Douglas, 2001. "Health insurance and female labor supply in Taiwan," Journal of Health Economics, Elsevier, vol. 20(2), pages 187-211, March.
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  20. Stephen Wu, 2003. "The Effects of Health Events on the Economic Status of Married Couples," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
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