In low and middle-income countries, it is essential to assess the economic consequences of health shocks given that few individuals and households are formally insured against such shocks and given an aging workforce in many countries. Using longitudinal data for the period 1993-2008 for a sample of adults in Indonesia, we determine how physical functioning limitations affect a range of outcomes, including employment status, hours worked, earnings, and type of job. We anticipate that this paper will make a unique contribution to the literature in three main ways. First, we use two empirical strategies (first-difference, first-difference IV) that have not been used so far to assess the impact of health on individual employment in a low or middle-income country setting. Second, we exploit a unique data set that makes it possible to study how health decrements impact employment for an aging population over a 15 year period, as health problems become more frequent. Finally, thanks to the rich data set, we are also in a position to study both the short- and long-run employment impact of permanent/temporary and severe/moderate health deteriorations. Earlier studies mostly relied on longitudinal data covering a two or three-year period and focused on the short term employment consequences of health problems. Preliminary results using a first-difference model with community and time interaction terms indicate that for our sample, deteriorations in physical functioning become increasingly common over time and have a negative significant and sizable impact on employment status, hours worked and earnings.