The impact of poor adult health on labor supply in the Russian Federation

Abstract

We examine the labor supply consequences of poor health in the Russian Federation, a country with exceptionally adverse adult health outcomes. In both baseline OLS models and in models with individual fixed effects, more serious ill-health events, somewhat surprisingly, generally have only weak effects on hours worked. At the same time, their effect on the extensive margin of labor supply is substantial. Moreover, when combining the effects on both the intensive and extensive margins, the effect of illness on hours worked increases considerably for a range of conditions. In addition, for most part of the age distribution, people with poor self-assessed health living in rural areas are less likely to stop working, compared to people living in cities. While there is no conclusive explanation for this finding, it could be related to the existence of certain barriers that prevent people with poor health from withdrawing from the labor force in order to take care of their health.Electronic supplementary materialThe online version of this article (doi:10.1007/s10198-016-0798-x) contains supplementary material, which is available to authorized users.

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