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Firm quality and health maintenance

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  • Bíró, Anikó
  • Elek, Péter

Abstract

We estimate the impact of firm quality – primarily measured by the firm-level wage premium – on the health maintenance of employees. Using linked employer–employee administrative panel data from Hungary, we analyze the dynamics of healthcare use before and after moving to a new firm. We show that moving to a higher-paying firm leads to higher consumption of drugs for cardiovascular conditions and more diagnostic and primary care visits, without evidence of deteriorating physical health, and, among men and older workers, to lower consumption of medications for mental health conditions. The results are robust to using alternative firm quality indicators based on productivity and worker flows, and to controlling for firm size, individual wage, and possible peer effects. The results suggest that higher-paying firms provide beneficial health-related amenities via the detection of previously undiagnosed chronic physical illnesses and improved mental health. Plausible mechanisms include higher-quality occupational health check-ups and less stressful working conditions.

Suggested Citation

  • Bíró, Anikó & Elek, Péter, 2025. "Firm quality and health maintenance," Journal of Health Economics, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:jhecon:v:103:y:2025:i:c:s0167629625000803
    DOI: 10.1016/j.jhealeco.2025.103045
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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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