Chapter 3 examines the extent to which a spouse’s ill-health influences the labor
supply decisions of the older men and women. Spouses’ ill-health is likely to affect their
partner’s labor supply decision in off-setting ways. I control for the income effect due to
the increase in the probability of an ill spouse to leave the labor force. Therefore, my
estimates reflect the direct impact of a spouse’s ill-health on the partner’s labor supply
decision through its effect on the partner’s reservation wage. However, it is likely that
spouses’ earnings are endogenous in these models due to unobserved characteristics
common to husbands and wives. I find that the estimated effect of a wife’s ill health on
their partner’s labor supply decision is dependent on whether I instrument the spouse’s
earnings. I also find that the estimated effect of husbands’ and wives’ ill health on their
partners’labor supply decision is dependent on the health measure used in the models