Heterogeneity in the impact of health shocks on labour outcomes: evidence from Swedish workers

Lundborg, Petter; Nilsson, Martin; Vikström, Johan

doi:10.1093/oep/gpv034

Cited by 48 publications

(44 citation statements)

References 22 publications

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“…This result is in line with the literature reviewed by Currie and Madrian (1999). However, in addition, we show that the negative effect of health shocks on these labor market outcomes is mitigated for workers with higher educational attainment, similar to the findings of Lundborg, Nilsson, and Vikström (2015) for Swedish workers. In the case of earnings, this mitigating effect of human capital persists when controlling for the possible pathways that operate through health insurance quality, industry type, and any past health event.…”

Section: Aggregate Health Shocksupporting

confidence: 92%

“…For instance, Dano (2005), Jeon (2017), and Lundborg, Nilsson, and Vikström (2015) use annual earnings reported on tax returns as a measure of the intensive labor supply margin. This type of data complicates the assessment of the timing of events, since lower earnings in a given year may result from a labor market shock that precedes a change in health status; thus, reverse causality cannot be ruled out.…”

Section: Introductionmentioning

confidence: 99%

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Health Shocks, Human Capital, and Labor Market Outcomes

Parro¹,

Pohl²

2018

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Health, human capital, and labor market outcomes are linked though complex connections that are not fully understood. We explore these links by estimating a flexible yet tractable dynamic model of human capital accumulation in the presence of health shocks using administrative data from Chile. We find that (i) human capital mitigates the negative labor market effects of health events, (ii) these alleviating effects operate through channels involving occupational choice, the frequency of exposure to health events, and access to health care, and (iii) the effect of health shocks on labor market outcomes is heterogeneous across industries and types of diagnoses. JEL Classification Codes: I10, I26, J22, J24

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Section: Aggregate Health Shocksupporting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Health Shocks, Human Capital, and Labor Market Outcomes

Parro¹,

Pohl²

2018

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“…Previous research has shown that individuals with positive control beliefs invest more in their own education (Coleman and Deleire 2003;Hadsell 2010) and in the education of their children (Lekfuangfu et al 2014), and adolescents' control beliefs are associated with parental socioeconomic status (Schurer 2015;Anger and Schnitzlein 2015). Lundborg et al (2015) show evidence on the education-related heterogeneity in the response to health shocks using Swedish administrative data, although the authors do not discuss the mechanisms. = 50.…”

Section: Mechanismmentioning

confidence: 98%

Bouncing back from health shocks: Locus of control and labor supply

Schurer

2017

Journal of Economic Behavior & Organization

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My findings provide clear evidence of personality differences in labour supply responses to health shocks amongst German men. When compared with men who have positive control beliefs, men with negative control beliefs are on average 100% more likely to drop out of the labour force after a health shock. This drop out is unrelated to early retirement. In addition, when compared with men who have positive control beliefs, men with negative control beliefs work on average 12% fewer hours per week over the year when experiencing a health shock. These behavioural differences are strongest for men from low socioeconomic backgrounds, men who do not have access to private health insurance, and men who experience high intensity shocks to their health. Different labour-supply responses are also observed for conscientiousness and risk tolerance, traits that have been linked with willingness to invest and treatment compliance.Teaching individuals the ability to interpret experiences in an optimistic fashion and to understand the importance of taking self-responsibility could be a cost-effective way to counter-balance rising health care costs associated with an aging society and with increasing prevalence rates of avoidable illnesses (such as obesity, diabetes and cardiovascular disease). This would require interventions at the person or community level, with the possibility that such interventions begin during infancy and teenage years. ABOUT THE AUTHORSStefanie Schurer is a Senior Lecturer in the School of Economics at The University of Sydney. Her main research interest is the Economics of Human Development. Most of her current research projects explore the evolution of skills, preferences, and health over the life course and the role that parents and the public sector play in determining these skills. AbstractMany studies have demonstrated a causal effect of ill health on labor-supply. In this study, Iexplore the personality-related heterogeneity -measured by differences in control beliefs -in the labor-supply response to health shocks. To identify such behavioral differences, I follow the labor-supply trajectories of 649 initially full-time employed and healthy men who experience at some point in time an episode of ill health. When compared with men who have positive control beliefs, men with negative control beliefs are on average 100% more likely to drop out of the labor force -a drop out unrelated to early retirement -and work on average 12% less hours per week the year after the health shock. These behavioral differences remain robust to alternative estimation samples and health-shock definitions. They are strongest for men from low socioeconomic backgrounds, who do not have access to private health insurance, or who experience high intensity shocks. Heterogeneous labor-supply responses are also observed for conscientiousness and risk tolerance, traits that have been linked with willingness to invest and treatment compliance. An important conclusion from the findings is that a small set of non-cognitive skills produ...

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“…Additionally, heterogeneity seems to play an important role in this type of studies as variables that capture the socioeconomic status of the individual prove determinant in explaining the labour market outcomes after becoming disabled. In this line, Lundborg et al (2011) highlight that, in Sweden, the reduction in labour earnings is stronger for low educated and older individuals. This group of papers that focuses on the effects of a disabling condition on labour market outcomes typically measure disability with self-reported information on health status.…”

Section: Introductionmentioning

confidence: 86%

The earnings and employment losses before entering the disability system

Cervini-Plá

Castelló

2018

Eur J Health Econ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACT The Earnings and Employment Losses Before Entering the Disability SystemAlthough a number of papers in the literature have shown the employment and wage differences between disabled and non-disabled individuals, not much is known about the potential employment and wage losses that disabled individuals suffer before being officially accepted into the disability insurance system (DI). Therefore, in this paper we distinguish between individuals that enter the DI system due to a working accident (sudden health shock) and individuals that become disabled due to an ordinary illness to identify the differences in employment and wages between these two groups before they are officially accepted into the DI system. We combine matching models and difference-in-difference and we find that the wage (employment) growth patterns of both groups of workers become significantly different three (six) years before entering the DI system. More specifically, our estimates suggest that one year before entering the system, there is a difference of 27 Euros/month in the wages of the two groups (3% of average wage) as well as a 10 percentage point difference in employment probabilities.JEL Classification: J31, I13

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Heterogeneity in the impact of health shocks on labour outcomes: evidence from Swedish workers

Cited by 48 publications

References 22 publications

Health Shocks, Human Capital, and Labor Market Outcomes

Health Shocks, Human Capital, and Labor Market Outcomes

Bouncing back from health shocks: Locus of control and labor supply

The earnings and employment losses before entering the disability system

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