Objectives The study aimed to (i) determine the influence of poor health on competing exit routes from paid employment among older workers in Europe, (ii) assess whether these risks are different among welfare state regimes in Europe, and (iii) evaluate differences in estimates between two different competing risk approaches.

Methods The study population consisted of 5273 respondents (6-years follow-up) from the Survey of Health, Ageing, and Retirement in Europe (SHARE). The effect of poor health on exit routes from paid employment was assessed with a cause-specific Cox model and a Fine & Gray (F&G) model. These two competing risk analyses were used to calculate absolute risks of labor force exit among welfare state regimes in Europe.

Results In both models, poor health was a risk factor for disability benefit [hazard ratio (HR) 3.36; subdistribution hazard ratio (SHR) 3.22], and unemployment (HR 1.43, SHR 1.32). Both models produced similar absolute risks. In countries with a Bismarckian welfare state regime, low-educated older workers living alone and in poor health had an 11% risk of disability benefit, 7% of unemployment, 46% of early retirement, and 7% of becoming economically inactive. In countries with a Scandinavian welfare state regime, the risks were 10%, 7%, 29%, and 3%, respectively, and in Southern European welfare state regimes 4%, 5%, 35%, and 7%.

Conclusions Workers with poor health are more likely to leave the labor force than workers with good health. The absolute risks of early retirement and becoming economically inactive were lowest in countries with a Scandinavian welfare state regime. For disability benefit and unemployment, absolute risks were lowest in Southern European welfare state regimes. The direct estimation of absolute risks of leaving the labor force in the presence of competing exit routes is an appealing feature of the F&G model.

Key terms cause-specific model; competing risk analysis; Cox proportional hazard model; disability benefit; early retirement; Europe; exit route from paid employment; Fine and Gray model; labor force exit; older worker; poor health; survival analysis; unemployment; workforce exit

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