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Dynamics of Poor Health and Non-Employment

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Author Info

  • Haan, Peter

    ()
    (DIW Berlin)

  • Myck, Michal

    ()
    (Centre for Economic Analysis, CenEA)

Abstract

While there is little doubt that the probability of poor health increases with age, and that less healthy people face a more difficult situation on the labour market, the precise relationship between facing the risks of health deterioration and labour market instability is not well understood. Using twelve years of data from the German Socio-Economic Panel we study the nature of the relationship between poor health and non-employment on a sample of German men aged 30-59. We propose to model poor health and non-employment as interrelated risks determined within a dynamic structure conditional on a set of individual characteristics. Applying dynamic panel estimation we identify the mechanism through which poor health contributes to the probability of being jobless and vice versa. We find an important role of unobserved heterogeneity and evidence for correlation in the unobservable characteristics determining the two processes. The results also show strong persistence in the dynamics of poor health and non-employment.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4154.

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Length: 24 pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4154

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Keywords: dynamic panel data; non-employment; risk; health; ageing;

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References

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Cited by:
  1. Emmanuelle Duguet & Christine Le Clainche, 2012. "The impact of health events on individual labor market histories : the message from difference in differences with exact matching," Working Papers 12-08, LAMETA, Universtiy of Montpellier, revised Mar 2012.
  2. Emmanuel Duguet & Christine Le Clainche, 2014. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues / Maladies chroniques et accidents : une évaluation de leur impact sur le parcours professionnel et les revenu," Working Papers halshs-00966970, HAL.
  3. Emmanuel Duguet & Christine Le Clainche, 2014. "The Impact of Health Events on Individual Labor Market Histories: the Message from Difference in Differences with Exact Matching / L'impact des événements de santé sur la carrière professionnelle ," Working Papers halshs-00966963, HAL.
  4. Emmanuel Duguet & Chr. Le Clainche, 2014. "The Effect of Non-Work Related Health Events on Career Outcomes: An Evaluation in the French Labor Market," Working Papers halshs-00674553, HAL.
  5. Emmanuel Duguet & Christine le Clainche, 2012. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues," Working Papers 12-02, LAMETA, Universtiy of Montpellier, revised Jan 2012.
  6. Datta Gupta, Nabanita & Kleinjans, Kristin J. & Larsen, Mona, 2011. "The Effect of an Acute Health Shock on Work Behavior: Evidence from Different Health Care Regimes," IZA Discussion Papers 5843, Institute for the Study of Labor (IZA).

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