Health and Family Labor Force Transitions

We examine the labor force participation responses of older families to changes in the health of family members in the U.S. using the Health and Retirement Study. We estimate transitions among four labor force states for married couples: both working, husband working, wife working and neither working. We find evidence that the onset of health problems increase the probability that the affected individual leaves the labor market. The unaffected spouse is likely to continue working if originally working, but is not likely to enter the labor market if not originally working following the onset of health problems of the spouse. Comparing our results to previous studies suggests that family responses to health changes have remained fairly stable over time in the U.S. In contrast, differences exist in family responses to health changes in the U.S. and Germany, possibly reflecting differences in the institutional environments in the two countries.