Degradation of porous silicon (PS) fabricated by laser-induced etching was studied using photoluminescence (PL) and Raman spectroscopy. Freshly prepared samples were given a heat treatment in hydrofluoric acid plus ferric nitrate solution to produce iron-passivated porous silicon (IPS) samples. PL measurements on IPS show different peak positions and widths as compared to freshly prepared non-passivated PS samples. Results were analyzed using a quantum confinement model. Exposing IPS to air for more than 4 months resulted in no degradation of PL intensity or changes in the peak position and size distribution. Raman spectra of IPS also revealed changes in line-shape asymmetry in comparison to freshly prepared non-passivated PS samples. The data were explained using the phonon confinement in two-dimensions. There is good agreement between PL and Raman data for the size of nanocrystallites participating in iron-passivation.