IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v136-137y2015ip44-51.html
   My bibliography  Save this article

The effect of a severe health shock on work behavior: Evidence from different health care regimes

Author

Listed:
  • Datta Gupta, Nabanita
  • Kleinjans, Kristin J.
  • Larsen, Mona

Abstract

In this paper, we use the policy variation of two different types of health insurance in the US and in Denmark – employer-provided and universal insurance combined with substantial differences in expected and actual medical out-of-pocket expenditures – to explore the effect of new severe health shocks on the labor force participation of older workers. Our results not only provide insight into how relative disease risk affects labor force participation at older ages, but also into how different types of health care and health insurance systems affect individual decisions of labor force participation. Although employer-tied health insurance and greater out-of-pocket medical expenditures give US Americans greater incentives to continue to work, we find only small differences in the work response between the two countries. We provide compelling evidence that our somewhat counterintuitive finding is the result of differential mortality and baseline health differences coupled with distinct treatment regimes under the respective health care systems.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:socmed:v:136-137:y:2015:i::p:44-51
    DOI: 10.1016/j.socscimed.2015.05.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0277953615002816
    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. Jonathan Gruber & Brigitte C. Madrian, 2002. "Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature," JCPR Working Papers 255, Northwestern University/University of Chicago Joint Center for Poverty Research.
    2. Marianne Simonsen & Lars Skipper & Niels Skipper, 2016. "Price Sensitivity of Demand for Prescription Drugs: Exploiting a Regression Kink Design," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(2), pages 320-337, March.
    3. Bound, John, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," American Economic Review, American Economic Association, vol. 79(3), pages 482-503, June.
    4. 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.
    5. Mark B. McClellan, 1998. "Health Events, Health Insurance, and Labor Supply: Evidence from the Health and Retirement Survey," NBER Chapters,in: Frontiers in the Economics of Aging, pages 301-350 National Bureau of Economic Research, Inc.
    6. Eric French & John Bailey Jones, 2011. "The Effects of Health Insurance and Self‐Insurance on Retirement Behavior," Econometrica, Econometric Society, vol. 79(3), pages 693-732, May.
    7. David M. Cutler, 2008. "Are We Finally Winning the War on Cancer?," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 3-26, Fall.
    8. Cathy Bradley & David Neumark & Meryl Motika, 2012. "The effects of health shocks on employment and health insurance: the role of employer-provided health insurance," International Journal of Health Economics and Management, Springer, vol. 12(4), pages 253-267, December.
    9. Gruber, Jonathan & Madrian, Brigitte C, 1995. "Health-Insurance Availability and the Retirement Decision," American Economic Review, American Economic Association, vol. 85(4), pages 938-948, September.
    10. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1.
    11. James Banks & Michael Marmot & Zoe Oldfield & James P. Smith, 2009. "The SES Health Gradient on Both Sides of the Atlantic," NBER Chapters,in: Developments in the Economics of Aging, pages 359-406 National Bureau of Economic Research, Inc.
    12. Haan, Peter & Myck, Michal, 2009. "Dynamics of health and labor market risks," Journal of Health Economics, Elsevier, vol. 28(6), pages 1116-1125, December.
    13. Gustman, Alan L. & Steinmeier, Thomas L., 2005. "The social security early entitlement age in a structural model of retirement and wealth," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 441-463, February.
    14. Michaud, Pierre-Carl & Goldman, Dana & Lakdawalla, Darius & Gailey, Adam & Zheng, Yuhui, 2011. "Differences in health between Americans and Western Europeans: Effects on longevity and public finance," Social Science & Medicine, Elsevier, vol. 73(2), pages 254-263, July.
    15. Brigitte C. Madrian, 1994. "Employment-Based Health Insurance and Job Mobility: Is there Evidence of Job-Lock?," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 27-54.
    16. Samuel H. Preston & Jessica Y. Ho, 2009. "Low Life Expectancy in the United States: Is the Health Care System at Fault?," NBER Working Papers 15213, National Bureau of Economic Research, Inc.
    17. Boyle, Melissa A. & Lahey, Joanna N., 2010. "Health insurance and the labor supply decisions of older workers: Evidence from a U.S. Department of Veterans Affairs expansion," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 467-478, August.
    18. Paul Bingley & Nabanita Datta Gupta & Peder J. Pedersen, 2004. "The Impact of Incentives on Retirement in Denmark," NBER Chapters,in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 153-234 National Bureau of Economic Research, Inc.
    19. 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.
    20. Bradley, Cathy J. & Neumark, David & Bednarek, Heather L. & Schenk, Maryjean, 2005. "Short-term effects of breast cancer on labor market attachment: results from a longitudinal study," Journal of Health Economics, Elsevier, vol. 24(1), pages 137-160, January.
    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. Virginie Comblon & Karine Marazyan, 2017. "Labor Supply Responses to Chronic Illness in Senegal," Working Papers 20170006, Université Paris 1 Panthéon Sorbonne, UMR Développement et Sociétés.
    2. Nga Le Thi Quynh & Groot, Wim & Tomini, Sonila M. & Tomini, Florian, 2017. "Effects of health insurance on labour supply: A systematic review," MERIT Working Papers 017, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Leinonen, Taina & Laaksonen, Mikko & Chandola, Tarani & Martikainen, Pekka, 2016. "Health as a predictor of early retirement before and after introduction of a flexible statutory pension age in Finland," Social Science & Medicine, Elsevier, vol. 158(C), pages 149-157.

    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:socmed:v:136-137:y:2015:i::p:44-51. 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/wps/find/journaldescription.cws_home/315/description#description .

    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.