Ageing Workforces, Ill‐health and Multi‐state Labour Market Transitions

Mark Harris, Xueyan Zhao and Eugenio Zucchelli

Oxford Bulletin of Economics and Statistics, 2021, vol. 83, issue 1, 199-227

Abstract: We provide novel evidence on the effects of ill‐health on the dynamics of labour state transitions by considering retirement as mobility between full‐time work, part‐time work, self‐employment and inactivity. We employ a dynamic multi‐state model which accounts for state dependence and different types of unobservables. Our model allows for both individual heterogeneity and labour‐state gravity as well as correlations between labour market states. We estimate this model on rich longitudinal data from the Household, Income and Labour Dynamics in Australia Survey. We find that both ill‐health and health shocks greatly increase the probability of leaving full‐time employment and moving into inactivity. Simulated dynamic trajectories suggest larger impacts of long‐term health conditions than those of a one‐off health shock and some evidence of health‐driven retirement pathways via part‐time work and self‐employment. Our findings also indicate that the effects of health changes could be underestimated and the magnitude of true labour market state dependence overestimated if individual effects or labour dynamic transitions are not accounted for in the model.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/obes.12379

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:obuest:v:83:y:2021:i:1:p:199-227

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0305-9049

Access Statistics for this article

Oxford Bulletin of Economics and Statistics is currently edited by Christopher Adam, Anindya Banerjee, Christopher Bowdler, David Hendry, Adriaan Kalwij, John Knight and Jonathan Temple

More articles in Oxford Bulletin of Economics and Statistics from Department of Economics, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().