The Effect of Disability/Health Problems Onset on Labor Force Exits of Older Workers: A Discrete Survival Analysis of Differences across Race

The onset of disabilities and/or health problems causes large earning losses for older workers of all racial groups. Although the previous literature has found substantial differences across race with respect to older worker labor participation, very few studies have investigated differences across race in labor force exits of older workers brought about by the onset of disabilities or health problems. Using a human capital investment framework, the study assesses dynamic racial differences in the risk of older workers exiting the labor market following the onset of disabilities or health problems. Using nationally representative longitudinal data from the Health and Retirement Study (HRS) 1992-2002, discrete survival-time hazard models are developed for older male workers and older female workers (age 50 and over) respectively. The results show that the risk of exiting the labor market is significantly higher for black female workers with any reported work limitations than for white female workers. There is no difference across race with respect to male workers. Females with higher levels of education or with less physically demanding jobs are less likely to exit the labor market following the onset of work limitations than those with lower levels of education or with more physically demanding jobs. However, differences in the effect of work limitations on hazard rates across race become weaker after adjusting for th