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Health and Wages: Panel Data Estimates Considering Selection and Endogeneity

  • Robert Jäckle
  • Oliver Himmler

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 earn between 1.3 percent and 7.8 percent more than those in poor health.

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File URL: http://jhr.uwpress.org/cgi/reprint/45/2/364
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 45 (2010)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:45:y:2010:i2:p364-406
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  1. Grossman, Michael, 2000. "The human capital model," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 7, pages 347-408 Elsevier.
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