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A sequential model of older workers' labor force transitions after a health shock
Author(s) -
JiménezMartín Sergi,
M. Labeaga José,
Vilaplana Prieto Cristina
Publication year - 2006
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1163
Subject(s) - spouse , spell , shock (circulatory) , demographics , demographic economics , demography , gerontology , medicine , health and retirement study , psychology , economics , sociology , anthropology
In this paper we estimate and validate a three‐period sequential model of older workers' labor force transitions following a health/disability shock, using retrospective information from Spanish cross‐section data. Central to the analysis are the effects of the various disabilities and their severity. We find that the probability of remaining employed decreases both with age and the severity of the shock. Moreover, we find strong interactions between age and severity for older workers and none for prime‐age workers. Suffering any kind of disability reduces the probability of being employed immediately prior to retirement age, and in such cases it is severity which is the strongest indicator. With respect to demographics, we find that female gender, having a retired spouse or being married all reduce the probabilities of both remaining in employment and returning to work following a spell of inactivity; in turn, principal breadwinner status, education and skill levels increase this likelihood. Copyright © 2006 John Wiley & Sons, Ltd.