Male Labour Force Participation Following Illness or Injury

Abstract

This paper develops a model of the disabled individual's labour force participation decision following illness or injury, and confronts it with data on the financial consequences of ill health. A utility function is specified which allows for the effect of changes in health on work-leisure preferences and is evaluated in relation to a household budget constraint. Estimation is through maximization of the appropriate likelihood function, correcting for self-selection bias within a switching regression model. Results are presented showing significant effects of financial variables on participation, and these are seen to vary with age, disability and income.