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Disentangling the Effects of Morbidity and Life Expectancy on Labor Market Outcomes

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  • Christopher Auld

    (University of Calgary)

Abstract

Using a unique longitudinal dataset tracking the experiences of patients diagnosed with HIV+ disease, this paper develops and estimates a model capable of recovering the effect of revisions in life expectancy on labor market outcomes. The data allow us to estimate the effect of changes in health status (as objectively measured by CD4 counts) and the impact of learning that one is HIV+, which we interpret as a negative shock to life expectancy. Both parametric and distribution-free models robustly indicate that decreases in health have little effect on labor demand but decrease probability of employment. We conclude that, in this sample, negative association between income and health is attributable mostly to the effect of altered incentives induced by changes in life expectancy. Copyright © 2002 John Wiley & Sons, Ltd.

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Bibliographic Info

Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2001-16.

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Date of creation: 05 Dec 2001
Date of revision: 05 Dec 2001
Handle: RePEc:clg:wpaper:2001-16

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References

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  1. Kahn, Matthew E, 1998. "Health and Labor Market Performance: The Case of Diabetes," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 878-99, October.
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  12. Lee, Lung-Fei, 1982. "Some Approaches to the Correction of Selectivity Bias," Review of Economic Studies, Wiley Blackwell, vol. 49(3), pages 355-72, July.
  13. MaCurdy, Thomas E, 1981. "An Empirical Model of Labor Supply in a Life-Cycle Setting," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1059-85, December.
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  16. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
  17. Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
  18. Stern, Steven, 1996. "Semiparametric estimates of the supply and demand effects of disability on labor force participation," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 49-70.
  19. Philipson, Tomas J & Posner, Richard A, 1995. "A Theoretical and Empirical Investigation of the Effects of Public Health Subsidies for STD Testing," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 445-74, May.
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Cited by:
  1. García-Gómez, Pilar & Labeaga, José M. & Oliva, Juan, 2012. "Employment and wages of people living with HIV/AIDS," MERIT Working Papers 043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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