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Health Status and Labour Force Participation: Evidence from the HILDA Data

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  • Lixin Cai

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Guyonne Kalb

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

Although the overseas literature on the effect of health on labour force participation is extensive, especially in the US, the literature in an Australian context is scarce. This paper contributes to the understanding of this issue using the recently released Household, Income and Labour Dynamics in Australia (HILDA) Survey data. The potential endogeneity of the health variables, especially self-assessed health, in the labour force participation equation is addressed by estimating the health equation and the labour force participation equation simultaneously. We also take into account the correlation between the error terms in the two equations to obtain an efficient result. The null-hypothesis of exogeneity of health to labour force participation is tested based on a test of the joint significance of the labour force participation variable in the health equation and the correlation coefficient of the two error terms.

Suggested Citation

  • Lixin Cai & Guyonne Kalb, 2004. "Health Status and Labour Force Participation: Evidence from the HILDA Data," Melbourne Institute Working Paper Series wp2004n04, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2004n04
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    References listed on IDEAS

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    2. Zamo-Akono, C. & Tsafack-Nanfosso, R., 2008. "Fécondité, Santé et Participation des femmes au Marché du Travail," MPRA Paper 10839, University Library of Munich, Germany.
    3. Cobb-Clark, Deborah A. & Stillman, Steven, 2006. "The Retirement Expectations of Middle-Aged Individuals," IZA Discussion Papers 2449, Institute of Labor Economics (IZA).
    4. Kulish Mariano & Kent Christopher & Smith Kathryn, 2010. "Aging, Retirement, and Savings: A General Equilibrium Analysis," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-32, July.
    5. Abdur Rauf & Maryyum Bashir & Kiran Asif & Sardar Fawad Saleem, 2018. "Impact of Health Expenditures on Labor Force Participation: Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 419-427, December.
    6. Janine Murphy, 2005. "Health promotion," Economic Roundup, The Treasury, Australian Government, issue 3, pages 13-38, September.
    7. Xiaoshu Han, 2006. "Medical Expenditure Puzzle," 2006 Meeting Papers 284, Society for Economic Dynamics.
    8. Rolle Remi Ahuru & Efegbere Henry Akpojubar, 2020. "The Effects Of Ill-Health And Disabilities On Labour Force Participation Among Nigerian Households," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 5(2), pages 8-19, September.
    9. 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.
    10. Peter Butterworth & Timothy Crosier, 2004. "Mental Health Problems, disability and income support receipt: a replication and extension using the HILDA Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(2), pages 151-174, June.
    11. 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.
    12. James Enright & Grant M Scobie, 2010. "Healthy, Wealthy and Working: Retirement Decisions of Older New Zealanders," Treasury Working Paper Series 10/02, New Zealand Treasury.

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    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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