Subjective Health Measures, Reporting Errors and Endogeneity in the Relationship Between Health and Work

Lindeboom MaartenKerkhofs Marcel
CEIS Research Paper
This paper explores the interrelation between health and work decisions of older workers. For this, two issues are of relevance. Firstly, health and work may be endogenously related because of direct effects of health on work and vice versa, and because of unobservables that may relate observed health and work outcomes. Secondly, social surveys usually contain self-assessed health measures and research indicates that these may be affected by endogenous, state-dependent, reporting behavior. 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.
Number: 46
Keywords: Work, health, endogeneity, subjective health, state-dependent reporting errors
JEL codes: I12, J14
Date: Monday 16 February 2004
Revision Date: Monday 16 February 2004