A Sequential Model for Older Workers' Labor Transitions After a Health Shock

35 Pages Posted: 19 Jul 2007

See all articles by Sergi Jimenez-Martin

Sergi Jimenez-Martin

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

J. Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics

Cristina Vilaplana

University of Murcia

Date Written: October 2005

Abstract

In this work we study older workers' (50—64) 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 50—64 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

Jimenez-Martin, Sergi and Labeaga Azcona, José Maria and Vilaplana, Cristina, A Sequential Model for Older Workers' Labor Transitions After a Health Shock (October 2005). Available at SSRN: https://ssrn.com/abstract=1001630 or http://dx.doi.org/10.2139/ssrn.1001630

Sergi Jimenez-Martin (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 16 67 (Phone)
(34) 93 542 17 46 (Fax)

José Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics ( email )

Calle Senda del Rey, 11
28040 Madrid
Spain
+34 91 398 7811 (Phone)
+34 91 398 6339 (Fax)

Cristina Vilaplana

University of Murcia ( email )

Avda Teniente Flomesta, 5
Murcia, Murcia 30100
Spain

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