Transitions Among States of Labor Force Participation in the Old Age

The study examines the labor-force behavior of Israelis at older ages, focusing on the determinants of the transitions between states of labor-force participation between 2005 and 2010. The study uses panel data from the first two waves of the SHARE-Israel longitudinal survey. A multinomial logit model is used to examine the impact of sociodemographic characteristics, health state, and economic resources on labor-force transitions of people aged 50–67. The results emphasize the role of age and poor health in ‘‘pushing'' older people out of the labor force or ‘‘keeping'' them there. Spouse's participation is found to encourage individuals to leave the labor force or to refrain from joining it. However, living with a participating spouse is negatively associated with staying out of the labor force, consistent with the dominance of the complementarity of leisure effect found in the literature. Wealth as an economic resource available to individuals for retirement is also found to encourage individuals to leave the labor force or to refrain from joining it