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Jobless Now, Sick Later? Investigating the Long-term Consequences of Involuntary Job Loss on Health

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  • Schröder, Mathis
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    Abstract

    In the light of the current economic crises which in many countries lead to business closures and mass lay-offs, the consequences of job loss are important on various dimensions. They have to be investigated not only in consideration of a few years, but with a long-term perspective as well, because early life course events may prove important for later life outcomes. This paper uses data from SHARELIFE to shed light on the long-term consequences of involuntary job loss on health. The paper distinguishes between two different reasons for involuntary job loss: plant closures, which in the literature are considered to be exogenous to the individual, and lay-offs, where the causal direction of health and unemployment is ambiguous. These groups are separately compared to those who never experienced a job loss. The paper uses eleven different measures of health to assess long-term health consequences of job loss, which has to have occurred at least 25 years before the current interview. As panel data cannot be employed, a large body of variables, including childhood health and socio-economic conditions, is used to control for the initial conditions. The findings suggest that individuals with an exogenous job loss suffer in the long run: men are significantly more likely to be depressed and they have more trouble knowing the current date. Women report poorer general health and more chronic conditions and are also affected in their physical health: they are more likely to be obese or overweight, and to have any limitations in their (instrumental) activities of daily living. In the comparison group of laid-off individuals, controlling for the initial conditions reduces the effects of job loss on health – proving that controlling for childhood conditions is important. --

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    File URL: http://econstor.eu/bitstream/10419/71606/1/Schroeder_2013_Jobless-Now-Sick.pdf
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    Bibliographic Info

    Article provided by ZBW - German National Library of Economics in its journal EconStor Open Access Articles.

    Volume (Year): (2013-03)
    Issue (Month): ()
    Pages: 5-15

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    Handle: RePEc:zbw:espost:71606

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    Related research

    Keywords: Unemployment; Health; Long-term consequences; Plant closures;

    References

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    1. Cavapozzi, Danilo & Garrouste, Christelle & Paccagnella, Omar, 2010. "Childhood, Schooling and Income Inequality," MEA discussion paper series 10212, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    2. Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
    3. Emilia Del Bono & Andrea Weber & Rudolf Winter-Ebmer, 2008. "Clash of Career and Family - Fertility Decisions after Job Displacement," Ruhr Economic Papers 0039, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    4. Smith, James P., 2009. "Re-Constructing Childhood Health Histories," IZA Discussion Papers 4036, Institute for the Study of Labor (IZA).
    5. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    6. Salm, Martin, 2009. "Does Job Loss Cause Ill Health?," IZA Discussion Papers 4147, Institute for the Study of Labor (IZA).
    7. Kerwin Kofi Charles & Melvin Stephens Jr., 2001. "Job Displacement, Disability, and Divorce," NBER Working Papers 8578, National Bureau of Economic Research, Inc.
    8. Gerdtham, Ulf-G. & Johannesson, Magnus, 2003. "A note on the effect of unemployment on mortality," Journal of Health Economics, Elsevier, vol. 22(3), pages 505-518, May.
    9. Marcus Eliason & Donald Storrie, 2009. "Does Job Loss Shorten Life?," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    10. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
    11. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues 92-28, Federal Reserve Bank of Chicago.
    12. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    13. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-24, March.
    14. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1265-1306, August.
    15. Kate Strully, 2009. "Job loss and health in the U.S. labor market," Demography, Springer, vol. 46(2), pages 221-246, May.
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