Health, Economic Resources And The Work Decisions Of Older Men

In this paper, the authors specify a dynamic programming model that addresses the interplay among health, financial resources, and the labor market behavior of men in the later part of their working lives. Unlike previous work which has typically used self reported health or disability status as a proxy for health status, they model health as a latent variable; using self reported disability status as an indicator of this latent construct. The model is explicitly designed to account for the possibility that the reporting of disability may be endogenous to the labor market behavior they are studying.