Abstract:The role of wages in the health‐employment nexus can be important for designing employment policies aimed at older workers with health limitations. We, therefore, estimate the direct effect of health on employment and hours worked and its indirect effect that is mediated through wages using individual‐level panel data from SHARE. The endogeneity of self‐reported health is controlled for by instrumenting it with severe health conditions in a correlated random effects model. For men, we find that the direct effe… Show more
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