Effects of Health and Education on Labour Force Participation

Staff working paper

Effects of Health and Education on Labour Force Participation by Patrick Laplagne, Maurice Glover and Anthony Shomos was released on 22 May 2007. The paper explores alternative methodologies to obtain estimates of the labour force participation effects of the health and education variables targeted by the National Reform Agenda. Also see:


Cover, Copyright, Contents, Acknowledgments, Abbreviations and explanations, Glossary, Key points, Overview

1   Introduction
1.1   The National Reform Agenda
1.2   Aim of the paper and analytical approach
1.3   Results and implications for the projected effects of the National Reform Agenda

2   Literature review
2.1   Health and participation
2.2   Education and participation

3   Endogeneity between human capital and participation

4   Data source

5   Results and discussion
5.1   Impact of greater educational attainment on labour force participation
5.2   Impact of improved health on labour force participation
5.3   Goodness of fit of the models
5.4   Evidence of endogeneity due to simultaneity and rationalisation
5.5   Evidence of endogeneity due to unobserved heterogeneity

6   Conclusion
6.1   Impact of endogeneity
6.2   Policy implications
6.3   Future research directions

A   Variable construction and descriptive statistics
A.1   Variable construction
A.2   Descriptive statistics

B   Direction of endogeneity bias
B.1   Endogeneity bias in the presence of unobserved heterogeneity
B.2   Endogeneity bias in the presence of simultaneity
B.3   Endogeneity bias in the presence of rationalisation endogeneity

C   Model estimation results
C.1   Multinomial logit models
C.2   Simultaneous equations model
C.3   Marginal effects estimates


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