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Income and Employment Effects of Health Shocks - A Test Case for the German Welfare State

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  • Riphahn, Regina T.

    (University of Erlangen-Nuremberg)

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

Suggested Citation

  • Riphahn, Regina T., 1998. "Income and Employment Effects of Health Shocks - A Test Case for the German Welfare State," IZA Discussion Papers 10, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10
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    More about this item

    Keywords

    health; labor force participation; welfare state; earnings;
    All these keywords.

    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
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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