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Income and employment effects of health shocks A test case for the German welfare state

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  • Regina T. Riphahn

    (SELAPO, University of Munich, Ludwigstrasse 28RG, D-80539 Munich, Germany)

Abstract

Using data from the first eleven waves of the German Socio-Economic Panel this study investigates the dynamic effects of health shocks on employment and economic well-being of older workers. A health shock trebles the probability of leaving the labor force and almost doubles the unemployment risk. The financial effects of health shocks are small on average and those individuals with the highest remaining earnings potential are least affected by the health shock. Welfare state instruments support the poorest section of the population but do not succeed in neutralizing the effects of a health shock for these groups.

Suggested Citation

  • Regina T. Riphahn, 1999. "Income and employment effects of health shocks A test case for the German welfare state," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 363-389.
  • Handle: RePEc:spr:jopoec:v:12:y:1999:i:3:p:363-389
    Note: Received: 9 April 1997/Accepted: 28 May 1998
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    More about this item

    Keywords

    Health · labor force participation · welfare state;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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