Acute health shocks and labour market outcomes: evidence from the post crash era

Publication type

Journal Article

Published in

Economics & Human Biology

Authors

Andrew M. Jones, Nigel Rice and Francesca Zantomio

Publication date

Summary

We investigate the labour supply response to an acute health shock for individuals of all working ages, in the post crash era, combining coarsened exact matching and entropy balancing to preprocess data prior to undertaking parametric regression. Identification exploits uncertainty in the timing of an acute health shock, defined by the incidence of cancer, stroke, or heart attack, based on data from Understanding Society. The main finding implies a substantial increase in the baseline probability of labour market exit along with reduced hours and earnings. Younger workers display a stronger labour market attachment than older counterparts, conditional on a health shock. Impacts are stronger for women, older workers, and those who experience more severe limitations and impairments. This is shown to be robust to a broad range of approaches to estimation. Sensitivity tests based on pre-treatment outcomes and using future health shocks as a placebo treatment support our identification strategy.

DOI

https://doi.org/10.1016/j.ehb.2019.100811

ISSN

16

Subjects

Labour Market, Economics and Health

Links

Notes

Online Early

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