The Dynamic Effects of Health on the Labor Force Transitions of Older Workers

John Bound, Michael Schoenbaum, Todd Stinebrickner and Timothy Waidmann

No 6777, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper addresses the interplay between health and labor market behavior in the later part of the working life. We use the longitudinal Health and Retirement Survey to analyze the dynamic relationship between health and alternative labor force transitions, including labor force exit, job change and application for disability insurance. Specifically, we examine how the timing of health shocks affects labor force behavior. Controlling for lagged values of health, poor contemporaneous health is strongly associated with labor force exit in general and with application for disability insurance in particular. At the same time, our evidence suggests that controlling for contemporaneous health, poor lagged health is associated with continued participation. Thus, it appears that not just poor health, but declines in health help explain retirement behavior. We conclude that modeling health in a dynamic, longitudinal framework offers important new insights into the effects of poor health on the labor force behavior of older workers.

JEL-codes: J14 J26 (search for similar items in EconPapers)
Date: 1998-11
Note: LS AG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Labour Economics, Vol. 6, no. 2 (June 1999): 179-202

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Journal Article: The dynamic effects of health on the labor force transitions of older workers (1999)
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