IDEAS home Printed from https://ideas.repec.org/a/eee/jhecon/v28y2009i6p1116-1125.html
   My bibliography  Save this article

Dynamics of health and labor market risks

Author

Listed:
  • Haan, Peter
  • Myck, Michal

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 labor market, the precise relationship between facing the risks of health deterioration and labor market instability is not well understood. Using 12 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 a joint model of health and labor market risks which identifies 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 health and labor market risks.

Suggested Citation

  • Haan, Peter & Myck, Michal, 2009. "Dynamics of health and labor market risks," Journal of Health Economics, Elsevier, vol. 28(6), pages 1116-1125, December.
  • Handle: RePEc:eee:jhecon:v:28:y:2009:i:6:p:1116-1125
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-6296(09)00093-9
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Beni­tez-Silva, Hugo & Ni, Huan, 2008. "Health status and health dynamics in an empirical model of expected longevity," Journal of Health Economics, Elsevier, vol. 27(3), pages 564-584, May.
    2. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    3. Pierre‐Carl Michaud & Konstantinos Tatsiramos, 2011. "Fertility and female employment dynamics in Europe: the effect of using alternative econometric modeling assumptions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(4), pages 641-668, June.
    4. Meghir, Costas & Whitehouse, Edward, 1997. "Labour market transitions and retirement of men in the UK," Journal of Econometrics, Elsevier, vol. 79(2), pages 327-354, August.
    5. 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.
    6. Richard Blundell & Costas Meghir & Sarah Smith, 2002. "Pension Incentives and the Pattern of Early Retirement," Economic Journal, Royal Economic Society, vol. 112(478), pages 153-170, March.
    7. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
    8. Rob Alessie & Stefan Hochguertel & Arthur van Soest, 2004. "Ownership of Stocks and Mutual Funds: A Panel Data Analysis," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 783-796, August.
    9. Bratberg, Espen, 1999. " Disability Retirement in a Welfare State," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 97-114, March.
    10. R. T. Riphahn, 1999. "Disability Retirement among German Men in the 1980s," ILR Review, Cornell University, ILR School, vol. 52(4), pages 628-647, July.
    11. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-394, October.
    12. Peter Adams & Michael D. Hurd & Daniel L. McFadden & Angela Merrill & Tiago Ribeiro, 2004. "Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Status," NBER Chapters,in: Perspectives on the Economics of Aging, pages 415-526 National Bureau of Economic Research, Inc.
    13. Lindeboom, Maarten & van Doorslaer, Eddy, 2004. "Cut-point shift and index shift in self-reported health," Journal of Health Economics, Elsevier, vol. 23(6), pages 1083-1099, November.
    14. Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999. "The dynamic effects of health on the labor force transitions of older workers," Labour Economics, Elsevier, vol. 6(2), pages 179-202, June.
    15. Chan, Sewin & Stevens, Ann Huff, 2001. "Job Loss and Employment Patterns of Older Workers," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 484-521, April.
    16. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
    17. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
    18. Disney, Richard & Emmerson, Carl & Wakefield, Matthew, 2006. "Ill health and retirement in Britain: A panel data-based analysis," Journal of Health Economics, Elsevier, vol. 25(4), pages 621-649, July.
    19. Nijman, T.E. & Verbeek, M.J.C.M., 1992. "Testing for selectivity in panel data models," Other publications TiSEM 7ec34a6c-1d84-4052-971c-d, Tilburg University, School of Economics and Management.
    20. Adriaan Kalwij & Frederic Vermeulen, 2008. "Health and labour force participation of older people in Europe: What do objective health indicators add to the analysis?," Health Economics, John Wiley & Sons, Ltd., vol. 17(5), pages 619-638.
    21. Pierre‐Carl Michaud & Konstantinos Tatsiramos, 2011. "Fertility and female employment dynamics in Europe: the effect of using alternative econometric modeling assumptions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(4), pages 641-668, June.
    22. Petri Böckerman & Pekka Ilmakunnas, 2009. "Unemployment and self-assessed health: evidence from panel data," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 161-179.
    23. H. Shelton Brown & José A. Pagán & Elena Bastida, 2005. "The impact of diabetes on employment: genetic IVs in a bivariate probit," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 537-544.
    24. Akay, Alpaslan, 2009. "The Wooldridge Method for the Initial Values Problem Is Simple: What About Performance?," IZA Discussion Papers 3943, Institute for the Study of Labor (IZA).
    25. Kathryn H. Anderson & Richard V. Burkhauser, 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 315-330.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fossen, Frank M. & König, Johannes, 2015. "Public health insurance and entry into self-employment," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112934, Verein für Socialpolitik / German Economic Association.
    2. Thomas Barnay & Julie Favrot & Catherine Pollak, 2015. "L'effet des arrêts maladie sur les trajectoires professionnelles," Économie et Statistique, Programme National Persée, vol. 475(1), pages 135-156.
    3. Ekaterina A. Klepikova, 2015. "Estimating the Relationship between Health and Employment of Russian People in Pensionable Age," HSE Working papers WP BRP 100/EC/2015, National Research University Higher School of Economics.
    4. Thomas Barnay, 2016. "Health, work and working conditions: a review of the European economic literature," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(6), pages 693-709, July.
    5. Michał Myck, 2010. "Wages and Ageing: Is There Evidence for the 'Inverse-U' Profile?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(3), pages 282-306, June.
    6. Verikios, George & Dixon, Peter B. & Rimmer, Maureen T. & Harris, Anthony H., 2015. "Improving health in an advanced economy: An economywide analysis for Australia," Economic Modelling, Elsevier, vol. 46(C), pages 250-261.
    7. Thomas Barnay & François Legendre, 2012. "Simultaneous causality between health status and employment status within the population aged 30-59 in France," Working Papers halshs-00856217, HAL.
    8. Andrew M. Jones & Nigel Rice & Francesca Zantomio, 2016. "Acute health shocks and labour market outcomes," Working Papers 2016:09, Department of Economics, University of Venice "Ca' Foscari".
    9. Adena, Maja & Myck, Michal, 2013. "Poverty and Transitions in Health," IZA Discussion Papers 7532, Institute for the Study of Labor (IZA).
    10. Mosthaf, Alexander, 2017. "Change in self-efficacy as a source of state dependence in labor market dynamics?," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168131, Verein für Socialpolitik / German Economic Association.
    11. repec:kap:sbusec:v:49:y:2017:i:3:d:10.1007_s11187-017-9843-0 is not listed on IDEAS
    12. Börsch-Supan, Axel & Brandt, Martina & Schröder, Mathis, 2013. "SHARELIFE - One Century of Life Histories in Europe," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-4.
    13. Trevisan, Elisabetta & Zantomio, Francesca, 2016. "The impact of acute health shocks on the labour supply of older workers: Evidence from sixteen European countries," Labour Economics, Elsevier, vol. 43(C), pages 171-185.
    14. Adena, Maja & Myck, Michal, 2014. "Poverty and transitions in health in later life," Social Science & Medicine, Elsevier, vol. 116(C), pages 202-210.
    15. Anna Kurowska & Michal Myck & Katharina Wrohlich, 2012. "Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy," Discussion Papers of DIW Berlin 1234, DIW Berlin, German Institute for Economic Research.
    16. Datta Gupta, Nabanita & Kleinjans, Kristin J. & Larsen, Mona, 2015. "The effect of a severe health shock on work behavior: Evidence from different health care regimes," Social Science & Medicine, Elsevier, vol. 136, pages 44-51.
    17. Michał Myck, 2011. "Policy challenges in Germany and Poland: what can we learn from the SHARE data," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 28.
    18. Bubonya, Melisa & Cobb-Clark, Deborah A. & Ribar, David C., 2017. "The Bilateral Relationship between Depressive Symptoms and Employment Status," IZA Discussion Papers 10653, Institute for the Study of Labor (IZA).
    19. Ayllón, Sara & Fusco, Alessio, 2017. "Are income poverty and perceptions of financial difficulties dynamically interrelated?," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 103-114.
    20. Johannes Geyer, 2011. "The Effect of Health and Employment Risks on Precautionary Savings," SOEPpapers on Multidisciplinary Panel Data Research 408, DIW Berlin, The German Socio-Economic Panel (SOEP).
    21. Eric Delattre & Richard Moussa & Mareva Sabatier, 2015. "Health condition and job status interactions: Econometric evidence of causality from a French longitudinal survey," THEMA Working Papers 2015-19, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    22. Daniel Kemptner, 2013. "Health-Related Life Cycle Risks and Public Insurance," SOEPpapers on Multidisciplinary Panel Data Research 583, DIW Berlin, The German Socio-Economic Panel (SOEP).
    23. repec:mea:meawpa:13273 is not listed on IDEAS
    24. Alexander Mosthaf, 2017. "Change in self-efficacy as a source of state dependence in labor market dynamics?," Working Papers 1715, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    25. Jule Specht & Boris Egloff & Stefan C. Schmukle, 2012. "Everything under Control?: The Effects of Age, Gender, and Education on Trajectories of Perceived Control in a Nationally Representative German Sample," SOEPpapers on Multidisciplinary Panel Data Research 445, DIW Berlin, The German Socio-Economic Panel (SOEP).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:28:y:2009:i:6:p:1116-1125. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/505560 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.