IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v23y2014i5p516-528.html
   My bibliography  Save this article

The Effects Of Health Status And Health Shocks On Hours Worked

Author

Listed:
  • Lixin Cai
  • Kostas Mavromaras
  • Umut Oguzoglu

Abstract

We investigate the impact of health on working hours. This is in recognition of the fact that leaving the labour market because of persistently low levels of health status, or because of new health shocks, is only one of the possible responses open to employees. We use the first six waves of the Household, Income and Labour Dynamics in Australia (HILDA) Survey to estimate the joint effect of health status and health shocks on working hours. To account for zero working hours, we use a dynamic random effects Tobit model of working hours. We follow Heckman (1981) and approximate the unknown initial conditions with a static equation that utilises information from the first wave of the data. Predicted individual health status is used to ameliorate the possible effects of measurement error and endogeneity. We conclude that overall, lower health status results in fewer working hours and that when they occur, health shocks lead to further reductions in working hours. Estimation results show that the model performs well in separating the time‐persistent effect of health status and the potentially more transient health shocks on working hours. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Lixin Cai & Kostas Mavromaras & Umut Oguzoglu, 2014. "The Effects Of Health Status And Health Shocks On Hours Worked," Health Economics, John Wiley & Sons, Ltd., vol. 23(5), pages 516-528, May.
    • Handle: RePEc:wly:hlthec:v:23:y:2014:i:5:p:516-528
    DOI: 10.1002/hec.2931
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.2931
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.2931?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. García-Gómez, Pilar & Jones, Andrew M. & Rice, Nigel, 2010. "Health effects on labour market exits and entries," Labour Economics, Elsevier, vol. 17(1), pages 62-76, January.
    2. Lixin Cai & Guyonne Kalb, 2007. "Health status and labour force status of older working-age Australian men," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 227-252.
    3. Regina T. Riphahn, 1999. "Income and employment effects of health shocks A test case for the German welfare state," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 363-389.
    4. repec:bla:ausecr:v:37:y:2004:i:3:p:343-349 is not listed on IDEAS
    5. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    6. Roberts, J & Rice, N & Jones, A.M, 2008. "Early retirement and inequality in Britain and Germany: How important is health?," Health, Econometrics and Data Group (HEDG) Working Papers 08/27, HEDG, c/o Department of Economics, University of York.
    7. Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999. "The dynamic effects of health on the labor force transitions of older workers," Labour Economics, Elsevier, vol. 6(2), pages 179-202, June.
    8. Brenda Gannon & Brian Nolan, 2004. "Disability and Labour Force Participation in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 35(2), pages 135-155.
    9. Nigel Rice & Jennifer Roberts & Andrew M. Jones, 2006. "Sick of work or too sick to work? Evidence on health shocks and early retirement from the BHPS," Health, Econometrics and Data Group (HEDG) Working Papers 06/13, HEDG, c/o Department of Economics, University of York.
    10. Eugenio Zucchelli & Andrew M. Jones & Nigel Rice & Anthony Harris, 2010. "The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(2), pages 191-218.
    11. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416, Elsevier.
    12. Haardt, David, 2006. "Transitions out of and back to employment among older men and women in the UK," ISER Working Paper Series 2006-20, Institute for Social and Economic Research.
    13. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
    14. Pelkowski, Jodi Messer & Berger, Mark C., 2004. "The impact of health on employment, wages, and hours worked over the life cycle," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(1), pages 102-121, February.
    15. Lixin Cai & Guyonne Kalb, 2006. "Health status and labour force participation: evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 241-261, March.
    16. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
    17. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    18. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
    19. Campolieti, Michele, 2002. "Disability and the labor force participation of older men in Canada," Labour Economics, Elsevier, vol. 9(3), pages 405-432, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lixin Cai, 2021. "The effects of health on the extensive and intensive margins of labour supply," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(1), pages 87-117, January.
    2. Zucchelli, E. & Harris, M. & Zhao, X., 2012. "Ill-health and transitions to part-time work and self-employment among older workers," Health, Econometrics and Data Group (HEDG) Working Papers 12/04, HEDG, c/o Department of Economics, University of York.
    3. Harris, M.N. & Zhao, X. & Zucchelli, E., 2016. "The dynamics of health and labour market transitions at older ages: evidence from a multi-state model," Health, Econometrics and Data Group (HEDG) Working Papers 16/30, HEDG, c/o Department of Economics, University of York.
    4. Sarah Brown & Jennifer Roberts & Karl Taylor, 2010. "Reservation wages, labour market participation and health," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(3), pages 501-529, July.
    5. Cai, Lixin, 2010. "The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model," Labour Economics, Elsevier, vol. 17(1), pages 77-90, January.
    6. Umut Oguzoglu, 2010. "Dynamics of work limitation and work in Australia," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 656-669, June.
    7. Verikios, George & Dixon, Peter B. & Rimmer, Maureen T. & Harris, Anthony H., 2015. "Improving health in an advanced economy: An economywide analysis for Australia," Economic Modelling, Elsevier, vol. 46(C), pages 250-261.
    8. Andrew M. Jones & Nigel Rice & Francesca Zantomio, 2016. "Acute health shocks and labour market outcomes," Working Papers 2016:09, Department of Economics, University of Venice "Ca' Foscari".
    9. Lixin Cai, 2009. "Effects of Health on Wages of Australian Men," The Economic Record, The Economic Society of Australia, vol. 85(270), pages 290-306, September.
    10. Lixin Cai & Guyonne Kalb, 2007. "Health status and labour force status of older working-age Australian men," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 227-252.
    11. Eric Delattre & Richard K. Moussa & Mareva Sabatier, 2019. "Health condition and job status interactions: econometric evidence of causality from a French longitudinal survey," Health Economics Review, Springer, vol. 9(1), pages 1-18, December.
    12. Lixin Cai & Changxin Cong, 2009. "Effects Of Health And Chronic Diseases On Labour Force Participation Of Older Working‐Age Australians," Australian Economic Papers, Wiley Blackwell, vol. 48(2), pages 166-182, June.
    13. Bakhtin, Maxim & Aleksandrova, Ekaterina, 2018. "Health and labor force participation of elderly Russians," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 49, pages 5-29.
    14. Edwin van Gameren, 2008. "Labor Force Participation of Mexican Elderly: The Importance of Health," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 23(1), pages 89-127.
    15. Zhang, Xiaohui & Zhao, Xueyan & Harris, Anthony, 2009. "Chronic diseases and labour force participation in Australia," Journal of Health Economics, Elsevier, vol. 28(1), pages 91-108, January.
    16. Jones, Andrew M. & Rice, Nigel & Zantomio, Francesca, 2020. "Acute health shocks and labour market outcomes: Evidence from the post crash era," Economics & Human Biology, Elsevier, vol. 36(C).
    17. Sergi Jiménez‐Martín & José M. Labeaga & Cristina Vilaplana Prieto, 2006. "A sequential model of older workers' labor force transitions after a health shock," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 1033-1054, September.
    18. Doreen Wing Han Au & Thomas F. Crossley & Martin Schellhorn, 2005. "The effect of health changes and long‐term health on the work activity of older Canadians," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 999-1018, October.
    19. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    20. Demianova, Anna & Lukiyanova, Anna, 2016. "The impact of disability status on labor supply in Russia," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 44, pages 50-74.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:23:y:2014:i:5:p:516-528. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.