The Effect of Health on the Labor Force Behavior of Elderly Men in Canada

This paper estimates a model of the labor force behavior of elderly males in Canada, paying explicit attention to the influence of health. The authors construct a health index using data from the Canada Health Survey. We estimate an earnings equation for full-year, full-time participants to obtain the potential earnings of each individual. We then examine four labor force states, using a hierarchical elimination-by-aspects (HEBA) model. Our results suggest that health is as important as potential earnings in determining the labor force behavior of men in Canada.