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The Impact of Education and Occupation on Temporary and Permanent Work Incapacity

Author

Listed:
  • Nabanita Datta Gupta

    () (Department of Economics and Business, Aarhus University, Denmark)

  • Daniel Lau

    (Cornell University, USA)

  • Dario Pozzoli

    (Department of Economics and Business, Aarhus University, Denmark)

Abstract

This paper investigates whether education and working in a physically demanding job causally impact temporary work incapacity, i.e. sickness absence, and permanent work incapacity, i.e. the inflow to disability via sickness absence. Our contribution is to allow endogeneity of both education and occupation by estimating a quasi-maximum-likelihood discrete factor model. Data on sickness absence and disability spells for the population of older workers come from the Danish administrative registers for 1998-2002. We generally find an independent role of both education and occupation on temporary work incapacity only. Having at least primary education reduces women's (men's) probability of temporary work incapacity by 16% (38%) while working in a physically demanding job increases it by 37% (26%). On the other hand, conditional on sickness absence, the effects of education and occupation on permanent work incapacity are generally insignificant.

Suggested Citation

  • Nabanita Datta Gupta & Daniel Lau & Dario Pozzoli, 2012. "The Impact of Education and Occupation on Temporary and Permanent Work Incapacity," Economics Working Papers 2012-25, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2012-25
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    File URL: ftp://ftp.econ.au.dk/afn/wp/12/wp12_25.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Pedersen, Morten Saaby & Arendt, Jacob Nielsen, 2014. "Bargaining for health: A case study of a collective agreement-based health program for manual workers," Journal of Health Economics, Elsevier, vol. 37(C), pages 123-136.

    More about this item

    Keywords

    Work incapacity; education; occupation; factor analysis; discrete factor model;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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