Overview

Abstract (English)

Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible endogeneity of self-reported health, particularly justification bias, and (2) the relative importance of health changes and long-term health in the decision to work. The NPHS contains the HUI3, an objective health index which has been gaining popularity in empirical work. We contrast estimates of the impact of health on employment using self-assessed health, the HUI3, and a purged health measure similar to that employed by Bound et al. (1999) and Disney et al. (2003). A direct test suggests that self-assessed health suffers from justification bias. However, the HUI3 provides estimates that are similar to the purged health measure. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

Abstract (French)

Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible endogeneity of self-reported health, particularly justification bias, and (2) the relative importance of health changes and long-term health in the decision to work. The NPHS contains the HUI3, an objective health index which has been gaining popularity in empirical work. We contrast estimates of the impact of health on employment using self-assessed health, the HUI3, and a purged health measure similar to that employed by Bound et al. (1999) and Disney et al. (2003). A direct test suggests that self-assessed health suffers from justification bias. However, the HUI3 provides estimates that are similar to the purged health measure. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.