Dynamics of health and labor market risks
Abstract
While there is little doubt that the probability of poor health increases with age, and that less healthy people face a more difficult situation on the labor market, the precise relationship between facing the risks of health deterioration and labor market instability is not well understood. Using 12 years of data from the German Socio-Economic Panel we study the nature of the relationship between poor health and non-employment on a sample of German men aged 30-59. We propose a joint model of health and labor market risks which identifies the mechanism through which poor health contributes to the probability of being jobless and vice versa. We find an important role of unobserved heterogeneity and evidence for correlation in the unobservable characteristics determining the two processes. The results also show strong persistence in the dynamics of health and labor market risks.
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Health has a strong effect on the decision to leave employment.
“As has been demonstrated in a number of studies in the past (Disney et al. 2006; Haan and Myck 2009), health is confirmed to have a strong effect on the decision to leave employment, and higher wealth encourages individuals to retire earlier.”
From Living longer, working longer: the need for a comprehensive approach to labour market reform in response to demographic changes (2015) · cites this paper as Haan and Myck 2009
Higher wealth encourages individuals to retire earlier.
“As has been demonstrated in a number of studies in the past (Disney et al. 2006; Haan and Myck 2009), health is confirmed to have a strong effect on the decision to leave employment, and higher wealth encourages individuals to retire earlier.”
From Living longer, working longer: the need for a comprehensive approach to labour market reform in response to demographic changes (2015) · cites this paper as Haan and Myck 2009
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References 33 · Cited by 96
- Authors
- Haan, P., & Myck, M.
- Affiliations
- German Institute for Economic Research (DE)
- Corresponding author
- Haan, Peter
- ORCID
- Haan, Peter
- Venue
- Journal of Health Economics
- Publisher
- Elsevier BV
- Published
- 2009-12
- Volume
- 28
- Issue
- 6
- Pages
- 1116-1125
- ISSN
- 0167-6296 (ISSN-L)
- OpenAlex
- W1991605095
- Cited by
- 96
- References
- 33
- Citations by year
- 2026: 1 · 2025: 6 · 2024: 5 · 2023: 12 · 2022: 5 · 2021: 3 · 2020: 5 · 2019: 10 · 2018: 5 · 2017: 7 · 2016: 5 · 2015: 13 · 2014: 3 · 2013: 3 · 2012: 6
- FWCI
- 11.74
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Health Economics (publishedVersion)
- PubMed (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Demography › Retirement, Disability, and Employment
- Health Sciences › Health Professions › General Health Professions › Employment and Welfare Studies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Keywords
- health deterioration, labor market risk, unemployment, unobserved heterogeneity, joint modeling, middle-aged men, German Socio-Economic Panel
- MeSH terms
- Adult, Aging, Employment, Germany, Health Status, Humans, Male, Middle Aged, Models, Econometric, Risk Assessment
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