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Income and employment effects of health shocks A test case for the German welfare state

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Author Info
Regina T. Riphahn () (SELAPO, University of Munich, Ludwigstrasse 28RG, D-80539 Munich, Germany)

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Abstract

Using data from the first eleven waves of the German Socio-Economic Panel this study investigates the dynamic effects of health shocks on employment and economic well-being of older workers. A health shock trebles the probability of leaving the labor force and almost doubles the unemployment risk. The financial effects of health shocks are small on average and those individuals with the highest remaining earnings potential are least affected by the health shock. Welfare state instruments support the poorest section of the population but do not succeed in neutralizing the effects of a health shock for these groups.

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Publisher Info
Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 12 (1999)
Issue (Month): 3 ()
Pages: 363-389
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:spr:jopoec:v:12:y:1999:i:3:p:363-389

Note: Received: 9 April 1997/Accepted: 28 May 1998
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Related research
Keywords: Health · labor force participation · welfare state;

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

References listed on IDEAS
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  1. Mary C. Daly & John Bound, 1995. "Worker Adaptation and Employer Accommodation Following the Onset of a Health Impairment," NBER Working Papers 5169, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Sikandar Siddiqui, 1997. "The pension incentive to retire: Empirical evidence for West Germany," Journal of Population Economics, Springer, vol. 10(4), pages 463-486. [Downloadable!] (restricted)
  3. Dilnot, Andrew, 1995. "The Assessment: The Future of the Welfare State," Oxford Review of Economic Policy, Oxford University Press, vol. 11(3), pages 1-10, Autumn.
  4. Steiner, Viktor, 1997. "Extended benefit entitlement periods and the duration of unemployment in West Germany," ZEW Discussion Papers 97-14, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  5. Sinn, Hans-Werner, 1995. "A Theory of the Welfare State," CEPR Discussion Papers 1278, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Orszag, Mike & Snower, Dennis J., 1997. "Expanding the Welfare System: A Proposal for Reform," CEPR Discussion Papers 1674, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Burkhauser, Richard V. & Butler, J. S. & Kim, Yang Woo, 1995. "The importance of employer accommodation on the job duration of workers with disabilities: A hazard model approach," Labour Economics, Elsevier, vol. 2(2), pages 109-130, June. [Downloadable!] (restricted)
  8. William E. Even & David A. Macpherson, 1996. "Employer size and labor turnover: The role of pensions," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 49(4), pages 707-728, July.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ronald Hagan & Andrew M. Jones & Nigel Rice, 2008. "Health Shocks and the Hazard Rate of Early Retirement in the ECHP," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 323-335, September. [Downloadable!]
  2. Sergi Jiménez-Martín & José M. Labeaga & Cristina Vilaplana Prieto, 2005. "A sequential model for older workers’ labor transitions after a health shock," Economics Working Papers 898, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  3. Stefanie Behncke, 2009. "How Does Retirement Affect Health?," University of St. Gallen Department of Economics working paper series 2009 2009-13, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  4. Lindelow, Magnus & Wagstaff, Adam, 2005. "Health shocks in China : are the poor and uninsured less protected ?," Policy Research Working Paper Series 3740, The World Bank. [Downloadable!]
  5. Pilar García Gómez, 2008. "Institutions, health shocks and labour outcomes across Europe," Working Papers 2008-01, FEDEA. [Downloadable!]
  6. Pagán Rodríguez, Ricardo, 2007. "Dynamic Analysis of Disability in Spain Using the European Community Household Panel/Análisis dinámico de la discapacidad en España con el Panel de Hogares de la Unión Europea," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 25, pages 499-522, Abril. [Downloadable!] (restricted)
  7. Roberts, J & Rice, N & Jones, A.M, 2008. "Early retirement and inequality in Britain and Germany: How important is health?," Health, Econometrics and Data Group (HEDG) Working Papers 08/27, HEDG, c/o Department of Economics, University of York. [Downloadable!]
    Other versions:
  8. William T. Gallo & Elizabeth H. Bradley & Stanislav V. Kasl, 2001. "The Effect of Job Displacement on Subsequent Health," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 159-165.
  9. Stefanie Schurer, 2008. "Discrete Heterogeneity in the Impact of Health Shocks on Labour Market Outcomes," Melbourne Institute Working Paper Series wp2008n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  10. García-Gómeza, P & Jones, A.M & Rice, N, 2008. "Health effects on labour market exits and entries," Health, Econometrics and Data Group (HEDG) Working Papers 08/03, HEDG, c/o Department of Economics, University of York. [Downloadable!]
  11. Petri Böckerman & Pekka Ilmakunnas, 2009. "Unemployment and self-assessed health: evidence from panel data," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 161-179. [Downloadable!]
    Other versions:
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