Frontiers in Public Health (Jul 2022)

The Effect of Health on the Elderly's Labor Supply in Rural China: Simultaneous Equation Models With Binary, Ordered, and Censored Variables

  • Na Tan,
  • Liang Chang,
  • Liang Chang,
  • Rui Guo,
  • Baiyi Wu

DOI
https://doi.org/10.3389/fpubh.2022.890374
Journal volume & issue
Vol. 10

Abstract

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In this study, we examined the effect of health on the elderly's labor supply in rural China based on the data of the Chinese Health and Nutrition Survey (CHNS) from 1997 to 2006. We used simultaneous equations to address the endogeneity problem of health and estimate the models with censored data of labor supply by the full information maximum likelihood estimation. We found that the failing health does not significantly decrease the elderly's labor supply in rural areas when using both the subjective (self-reported health status) and objective (hypertension diagnosed or not) health indicators. Our finding indicates the phenomenon of “ceaseless toil” for the elderly in rural China, i.e., the elderly almost work their whole life even if they are not physically capable. The results remain robust when using a two-stage limited information maximum likelihood estimation.

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