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Socioeconomic Heterogeneity in the Effect of Health Shocks on Earnings. Evidence from Population-Wide Data on Swedish Workers

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  • Lundborg, Petter

    ()
    (Lunds University)

  • Nilsson, Martin

    ()
    (Uppsala Center for Labor Studies)

  • Vikström, Johan

    ()
    (Uppsala Center for Labor Studies)

Abstract

In this paper, we estimate socioeconomic heterogeneity in the effect of unexpected health shocks on labor market outcomes, using register-based data on the entire population of Swedish workers. We effectively exploit a Difference-in-Difference-in-Differences design, in which we compare the change in labor earnings across treated and control groups with high and low education levels. If the anticipation effects are similar for individuals with high and low education, any difference in the estimates across socioeconomic groups could plausibly be given a causal interpretation. Our results suggest a large amount of heterogeneity in the effects, in which individuals with a low education level su er relatively more from a given health shock. These results hold across a wide range of different types of health shocks and become more pronounced with age. Our results suggest that socioeconomic heterogeneity in the effect of health shocks offers one explanation for how the socioeconomic gradient in health arises.

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Bibliographic Info

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Labor Studies with number 2011:19.

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Length: 42 pages
Date of creation: 03 Nov 2011
Date of revision:
Handle: RePEc:hhs:uulswp:2011_019

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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
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Web page: http://www.nek.uu.se/
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Keywords: Health; Health Shocks; Socioeconomic Status; Life-cycle;

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  1. Fabrice Etilé & Carine Milcent, 2006. "Income-related reporting heterogeneity in self-assessed health: evidence from France," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 965-981.
  2. Hans van Kippersluis & Tom van Ourti & Owen O'Donnell & Eddy van Doorslaer, 2008. "Health and Income across the Life Cycle and Generations in Europe," Tinbergen Institute Discussion Papers 08-009/3, Tinbergen Institute.
  3. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
  4. Jennifer Stewart, 1999. "The Impact of Health Status on the Duration of Unemployment Spells and the Implications for Studies of the Impact of Unemployment on Health Status," Working Papers 33, National University of Ireland Galway, Department of Economics, revised 1999.
  5. Doreen Wing Han Au & Thomas F. Crossley & Martin Schellhorn, 2005. "The Effect of Health Changes and Long-term Health on the Work Activity of Older Canadians," Quantitative Studies in Economics and Population Research Reports 397, McMaster University.
  6. Richard Disney & Carl Emmerson & Matthew Wakefield, 2003. "Ill health and retirement in Britain: a panel data based analysis," IFS Working Papers W03/02, Institute for Fiscal Studies.
  7. Fredriksson, Peter & Johansson, Per, 2008. "Dynamic Treatment Assignment," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 435-445.
  8. van Doorslaer, Eddy & Wagstaff, Adam & Bleichrodt, Han & Calonge, Samuel & Gerdtham, Ulf-G. & Gerfin, Michael & Geurts, Jose & Gross, Lorna & Hakkinen, Unto & Leu, Robert E., 1997. "Income-related inequalities in health: some international comparisons," Journal of Health Economics, Elsevier, vol. 16(1), pages 93-112, February.
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Cited by:
  1. Cervini-Plá, María & Silva, José I. & Vall-Castello, Judit, 2012. "Estimating the Income Loss of Disabled Individuals: The Case of Spain," IZA Discussion Papers 6752, Institute for the Study of Labor (IZA).
  2. Erixson, Oscar, 2014. "Health Responses to a Wealth Shock: Evidence from a Swedish Tax Reform," Working Paper Series 1011, Research Institute of Industrial Economics.

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