The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey

Eugenio Zucchelli, Andrew Jones, Nigel Rice and Anthony Harris

Australian Journal of Labour Economics (AJLE), 2010, vol. 13, issue 2, 191-218

Abstract: This paper analyses the relationship between ill-health, health shocks and early labour market exits among older working individuals. We represent the transition to non-employment as a discrete-time hazard model using a stock-sample from the first six waves (2001-2006) of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Our results show that health shocks are key determinants of early exit choices. For men, negative shocks to health increase the hazard of becoming non-employed by 50 to 320 per cent, whereas for women, health shocks increase the hazard of an early exit from the labour market by 68 to 74 per cent. These findings are confirmed by both a measure of health limitations and a measure of latent health obtained using pooled ordered probit models as well as for two alternative definitions of health shocks.

Keywords: Health: General; Econometric and Statistical Methods and Methodology: General; Duration Analysis; Optimal Timing Strategies; Economics of the Elderly; Economics of the Handicapped; Non-labour Market Discrimination (search for similar items in EconPapers)
JEL-codes: C10 C41 I11 J14 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (39)

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