Health Impacts on Labor Participation of Elderly Japanese Males

The main object of this study is to investigate the relationship between individuals’ health status and labor participation among middle-aged and elderly males in Japan using a unique panel dataset. Our analysis focuses on three types of health indicators based on respondents’ medical history in the three years preceding the survey. To adjust for the potential endogeneity of the health variables, we use individuals’ body mass index at age 30 and their parents’ medical history as instrumental variables. Our empirical results show that a deterioration in health increases the probability of not working and being retired and, moreover, tends to decrease individuals’ average working hours per week. Further, splitting our sample, we find that, compared with males under 60 years of age, the work status of males aged 60 or over is significantly more likely to be affected by having one additional illness and suffering from a lifestyle disease than that of under 60s.