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Health and Wages - Panel data estimates considering selection and endogeneity

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  • Jäckle, Robert
  • Himmler, Oliver

Abstract

This paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity, sample selection, and endogeneity in one comprehensive framework. Using data from the German Socio-Economic Panel (GSOEP) we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary. Good health leads to higher wages for men, while there appears to be no significant effect for women. Contingent on the method of estimation, healthy males are estimated to earn between 1.3% and 7.8% more than those in poor health.

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File URL: http://mpra.ub.uni-muenchen.de/11578/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11578.

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Date of creation: Feb 2007
Date of revision: Nov 2008
Handle: RePEc:pra:mprapa:11578

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Keywords: health; wages; fixed effects; sample selection; instrumental variables;

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References

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  1. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
  2. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  3. María Engracia ROCHINA-BARRACHINA, 1999. "A New Estimator for Panel Data Sample Selection Models," Annales d'Economie et de Statistique, ENSAE, issue 55-56, pages 153-181.
  4. (*), Nigel Rice & Paul Contoyannis, 2001. "The impact of health on wages: Evidence from the British Household Panel Survey," Empirical Economics, Springer, vol. 26(4), pages 599-622.
  5. Anastasia Semykina & Jeffrey M. Woodridge, 2010. "Estimating Panel Data Models in the Presence of Endogeneity and Selection," Working Papers wp2010_10_01, Department of Economics, Florida State University.
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  7. Christian Dustmann & Mar�a Engracia Rochina-Barrachina, 2007. "Selection correction in panel data models: An application to the estimation of females' wage equations," Econometrics Journal, Royal Economic Society, vol. 10(2), pages 263-293, 07.
  8. Lixin Cai, 2007. "Effects of Health on Wages of Australian Men," Melbourne Institute Working Paper Series wp2007n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  9. Timothy J Halliday, 2005. "Heterogeneity, State Dependence and Health," Working Papers 200503, University of Hawaii at Manoa, Department of Economics.
  10. Robert Haveman & Mark Stone & Barbara Wolfe, 1989. "Market Work, Wages, and Men's Health," NBER Working Papers 3020, National Bureau of Economic Research, Inc.
  11. Paul Contoyannis & Andrew M. Jones & Nigel Rice, 2004. "The dynamics of health in the British Household Panel Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(4), pages 473-503.
  12. Verbeek, Marno & Nijman, Theo, 1992. "Testing for Selectivity Bias in Panel Data Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 681-703, August.
  13. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
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  15. Laura Romeu Gordo, 2006. "Effects of short- and long-term unemployment on health satisfaction: evidence from German data," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2335-2350.
  16. Lynn M Gambin, 2005. "The impact of health on wages in Europe – does gender matter?," Health, Econometrics and Data Group (HEDG) Working Papers 05/03, HEDG, c/o Department of Economics, University of York.
  17. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
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Cited by:
  1. Manuel Flores & Adriaan Kalwij, 2013. "What do wages add to the health-employment nexus? Evidence from older European workers," Documentos de trabajo - Analise Economica 0054, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
  2. Wunder, Christoph & Wiencierz, Andrea & Schwarze, Johannes & Küchenhoff, Helmut & Kleyer, Sara & Bleninger, Philipp, 2009. "Well-Being over the Life Span: Semiparametric Evidence from British and German Longitudinal Data," IZA Discussion Papers 4155, Institute for the Study of Labor (IZA).
  3. Fomba Kamga, Benjamin & Kengne Kamga, Arline & Audibert, Martine, 2013. "Health and Labour Income of Wage Earners and Self-Employed Workers in Cameroon," IZA Discussion Papers 7324, Institute for the Study of Labor (IZA).
  4. M. Angeles Carnero Fernández & Blanca Martínez & Rocío Sánchez Mangas, 2010. "Mobbing and workers' health: an empirical analysis for Spain," Working Papers. Serie AD 2010-30, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Johannes Geyer, 2011. "The Effect of Health and Employment Risks on Precautionary Savings," Discussion Papers of DIW Berlin 1167, DIW Berlin, German Institute for Economic Research.
  6. Pouliakas, Konstantinos & Panos, Georgios & Zangelidis, Alexandros, 2009. "The Inter-Related Dynamics of Dual Job Holding, Human Capital and Occupational Choice," MPRA Paper 16859, University Library of Munich, Germany.
  7. Görlitz, Katja, 2011. "Continuous training and wages: An empirical analysis using a comparison-group approach," Economics of Education Review, Elsevier, vol. 30(4), pages 691-701, August.
  8. Drydakis, Nick, 2013. "The Effect of Sexual Activity on Wages," IZA Discussion Papers 7529, Institute for the Study of Labor (IZA).
  9. Yolanda Pena-Boquete & Manuel Flores, 2013. "Earnings returns to education, experience and health: Evidence from EU-SILC," ERSA conference papers ersa13p1169, European Regional Science Association.
  10. Laurent Lequien, 2012. "Parental Leave Duration and Wages: A Structural Approach," Working Papers 2012-04, Centre de Recherche en Economie et Statistique.
  11. Forbes, Matthew & Barker, Andrew & Turner, Stewart, 2010. "The Effects of Education and Health on Wages and Productivity," Staff Working Papers 101, Productivity Commission, Government of Australia.

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