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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

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File URL: http://ftp.iza.org/dp10.pdf
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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10.

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Length: 42 pages
Date of creation: Jun 1998
Date of revision:
Publication status: published in: Journal of Population Economics, 1999, 12 (3), 363-389
Handle: RePEc:iza:izadps:dp10

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Related research

Keywords: welfare state; labor force participation; health; earnings;

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References

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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.
  2. Orszag, Mike & Snower, Dennis J., 1997. "Expanding the Welfare System: A Proposal for Reform," CEPR Discussion Papers 1674, C.E.P.R. Discussion Papers.
  3. Hans-Werner Sinn, 1996. "A Theory of the Welfare State," NBER Working Papers 4856, National Bureau of Economic Research, Inc.
  4. Regina Riphahn, 1997. "Disability retirement and unemployment - substitute pathways for labour force exit? An empirical test for the case of Germany," Applied Economics, Taylor & Francis Journals, vol. 29(5), pages 551-561.
  5. 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.
  6. William E. Even & David A. Macpherson, 1996. "Employer size and labor turnover: The role of pensions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(4), pages 707-728, July.
  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.
  8. 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.
  9. Booth, Alison L. & Garcia-Serrano, Carlos & Jenkins, Stephen P., 1996. "New men and new women: is there convergence in patterns of labour market transition?," ISER Working Paper Series 96-09, Institute for Social and Economic Research.
  10. Sikandar Siddiqui, 1997. "The pension incentive to retire: Empirical evidence for West Germany," Journal of Population Economics, Springer, vol. 10(4), pages 463-486.
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