This paper finds a statistically significant negative association between health status and labour force participation.
Abstract: This paper examines the association between health status and participation in the labour force using pooled unit-record data created from the ABS’s five consecutive cross-sectional National Health Surveys. Descriptive analysis of labour force participation, health status and other selected variables was conducted. A simple age–period–cohort decomposition model was used to examine the relative influence of these three factors on labour force participation. A logistic regression model was used to examine the association between participation in the labour force and health status, controlling for other relevant demographic/ socioeconomic variables including age, period and cohorts. Two self-reported health indicators, namely self-assessed general health status and the presence of selected long-term health conditions, were alternatively used to represent the health status variable in the model. The empirical results suggested a statistically significant negative association between health status and labour force participation, and this relationship was found to be robust to the alternative measures of the health variable used in the analysis. Based on changes in predicted probabilities for both males and females, those with fair or poor self-assessed health status were less likely to participate in the labour force compared with those with good or better health. Likewise, there was also a strong negative relationship between major chronic diseases, such as arthritis, diabetes, heart disease, cancer and asthma, and labour force participation for both males and females, with the relative importance of these diseases varying for the sexes. The association between health indicators and labour force participation appeared to be stronger for females than for males.