A Sequential Model for Older Workers' Labor Transitions After a Health Shock
35 Pages Posted: 19 Jul 2007
Date Written: October 2005
Abstract
In this work we study older workers' (5064) labor force transitions after a health/disability shock. We find that the probability of keeping working decreases with both age and severity of the shock. Moreover, we find strong interactions between age and severity in the 5064 age range and none in the 30-49 age range. Regarding demographics we find that being female and married reduce the probability of keeping work. On the contrary, being main breadwinner, education and skill levels increase it. Interestingly, the effect of some demographics changes its sign when we look at transitions from inactivity to work. This is the case of being married or having a working spouse. Undoubtedly, leisure complementarities should play a role in the latter case. Since the data we use contains a very detailed information on disabilities, we are able to evaluate the marginal effect of each type of disability either in the probability of keeping working or in returning back to work. Some of these results may have strong policy implications.
Keywords: Health shocks, disability, labor force transitions, older workers, Spain
JEL Classification: J23, J26, I12
Suggested Citation: Suggested Citation
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