Mental health and employment of the elderly in taiwan: A simultaneous equation approach

Longer life expectancy and declining birth rates have contributed to an aging population in many countries. This paper addresses the relationship between mental health and employment status among the elderly in Taiwan. A simultaneous equation system is developed that accommodates the discrete and censored nature of the two endogenous variables. Using data from a nationwide survey of the elderly in Taiwan, we find that older adults with mental illness are less likely to work, while those currently working are less prone to mental illness compared to their unemployed cohort. ? 2011 The Authors. Pacific Economic Review ? 2011 Blackwell Publishing Asia Pty Ltd.