Health and Work of the Elderly Subjective Health Measures: Reporting Errors and the Endogenous Relationship between Health and Work

43 Pages Posted: 9 Apr 2002

See all articles by Maarten Lindeboom

Maarten Lindeboom

Vrije Universiteit Amsterdam; Tinbergen Institute Amsterdam; IZA Institute of Labor Economics

Marcel Kerkhofs

Tilburg University - OSA Institute for Labour Studies

Date Written: March 2002

Abstract

This paper aims to explore the interrelation between health and work decisions of elderly workers, taking the various ways in which health and work can influence each other explicitly into account. For this, two issues are of relevance. Self-assessed health measures are usually at hand in empirical analyses and research indicates that these may be endogenous, state dependent, reporting behaviour. Furthermore, even if an objective health measure is used, it is not likely to be strictly exogenous to labour market status or labour income. Health and labour market variables are correlated because of unobserved individual-specific characteristics (e.g., investments in human capital and health capital) Moreover, one's labour market status is expected to have a (reverse) causal effect on health. A solution to the "Health and Retirement Nexus" requires an integrated model for work decisions, health production and health reporting mechanisms. We formulate such a model and estimate it on a longitudinal dataset of Dutch elderly.

Keywords: Retirement, Health, Endogeneity, State Dependent Reporting Errors

JEL Classification: I12, J14

Suggested Citation

Lindeboom, Maarten and Kerkhofs, Marcel, Health and Work of the Elderly Subjective Health Measures: Reporting Errors and the Endogenous Relationship between Health and Work (March 2002). IZA Discussion Paper No. 457. Available at SSRN: https://ssrn.com/abstract=306290

Maarten Lindeboom (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6033 (Phone)
+31 20 444 6020 (Fax)

Tinbergen Institute Amsterdam

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Marcel Kerkhofs

Tilburg University - OSA Institute for Labour Studies ( email )

Postbus 90153
Tilburg, DC 5000 LE
Netherlands

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