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IZA Discussion Paper No. 1281
September 2004
The Effect of Health Changes and Long-Term Health on the Work Activity of Older Canadians

revised version published in: Health Economics, 2005, 14 (10), 999-1018

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 endogeneity of self-reported health, particularly "justification bias", and (2) the relative importance of health changes and long-term health in the decision to work. The NPHS contains the HUI3, an "objective" health index which has been gaining popularity in empirical work. We contrast estimates of the impact of health on employment using self-assessed health, the HUI3, and a "purged" health measure similar to that employed by Bound et al. (1999) and Disney et al. (2003). A direct test suggests that self-assessed health suffers from justification bias. However, the HUI3 provides estimates that are similar to the "purged" health measure. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Netzwerkkoordination
Christina Gathmann
christina.gathmann@liser.lu

Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

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