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The Dynamic Effects of Health on the Employment of Older Workers: Impacts by Gender, Country, and Race

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Abstract

Using data from the Health and Retirement Study (HRS) and the English Longitudinal Study of Ageing (ELSA), we estimate the impact of health on employment. Estimating the model separately by race and gender, we find that racial differences in employment can be partly explained by the worse health of minorities and the larger impact of health on employment for these groups.

Key Findings

We investigate the effect of health on the employment of those ages 50 to 70, by race, gender, and country.

  • Employment rates of nonwhites are significantly lower in the U.S. In England racial differences in employment are modest. However, in the U.S. employment rates of white men (women) are over 10 (5) percentage points higher than for nonwhites in their 50s.
  • In both the U.S. and England, nonwhites are on average in worse health. These racial differences in health are larger in the U.S. than in England. Furthermore, these racial differences in health are larger for women than men in both countries. These differences in health exist among both objective measures (such as diabetes, heart attacks) as well as when using more subjective measures of overall well-being.
  • Those these racial differences in health largely explain differences in employment across races. In fact, once we condition on health and education, nonwhites have higher employment rates than whites, with health explaining more than education.
  • The impact of health shocks on employment is larger for nonwhites than for whites and is larger in the U.S. than England. For example, declining health can explain 13% (19%) of the employment decline for white (nonwhite) women in the U.S. Part, although not all, of these differences are explained by the occupational demands of the jobs held by nonwhites.

 

Citation

Blundell, Richard, Jack Britton, Monica Costa Dias, Eric French, and Weijian Zou. 2022. “The Dynamic Effects of Health on the Employment of Older Workers: Impacts by Gender, Country, and Race.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2022-451. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp451.pdf

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Project

Paper ID

WP 2022-451

Publication Type

Working Paper

Publication Year

2022