By World Health Organization
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The former approach (Cox regression) assesses the effect of chronic illness on the probability that an individual will retire in a given year after the first year of employment. This methodology’s limitation is that we cannot be entirely sure about the direction of the causality – does ill-health predict retirement or vice versa? The second approach (the panel logit regression) is more appropriate to address this issue, since it examines the effect of chronic illness on the probability of retiring in the subsequent year.
Ordinary least squares estimation). The proposed solutions to the endogeneity problem also critically depend on the health indicator used and the potential measurement error associated with the given health indicator, because in some cases the particular kind of measurement error can offset the bias resulting from the endogeneity problem. We have used three methods, all adopted from the existing literature. The main data source to which we applied the methods is the RLMS, specifically the four years from 1999 to 2002.
None of these scenarios is based on the detailed modelling of the impact of specific policy interventions; this remains a topic for further research. e. based on the mortality reductions that other western or northern European countries have achieved over the decades. While the most ambitious scenario is indeed very ambitious, it has been achieved in the past (for example the North Karelian and Finnish experiences (World Bank 2005)). Readers will note that the actual levels of the mortality rates foreseen in each of these scenarios are less relevant than the difference between them: the difference between any two scenarios determines the opportunity cost or benefit of the respective scenarios.