The Effect of Health Status on the Labor Supply of Older Married Couples

The purpose of this research is to examine whether spouses increase or decrease their hours of work when their partners have poor health. The theoretical effect of caregiving on hours of paid work would suggest that caregivers would have lower hours of work due to the potential decrease in the time available for work. But compared to most other types of caregivers, spousal caregivers may also increase hours of work or enter the labor market due to the need to maintain the family's finances. This study contributes to the body of research on this topic by using measures of health status that are defined separately from the labor supply decision and by estimating a model which allows for the joint labor supply decision making process of married couples. The data come from the first wave of the Health and Retirement Study, a nationally representative study of U.S. Households in which at least one member of the household is 51 to 61 years old in 1992. The estimated results show that every additional doctor visit by her husband increases the wife's hours of work by 6.5 Hours per year. The husband's annual hours of work increase by 3.4 Hours for each day his wife stays in bed due to poor health. In a model that allows for a nonlinear relationship between spouse's time for health production and his or her partner's labor supply, the husband's hours of work increase when his wife has up to 27 doctor visits per year, and then decrease when she has more than 27 doctor visits.

Health Sciences, Public Health (0573)

5033

ISBN 0-599-02213-2