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Losing Heart? The Effect of Job Displacement on Health

  • Black, Sandra
  • Devereux, Paul J.
  • Salvanes, Kjell G

Job reallocation is considered to be a key characteristic of well-functioning labor markets, as more productive firms grow and less productive ones contract or close. However, despite its potential benefits for the economy, there are significant costs that are borne by displaced workers. We study how job displacement in Norway affects cardiovascular health using a sample of men and women who are predominantly aged in their early forties. To do so we merge survey data on health and health behaviors with register data on person and firm characteristics. We track the health of displaced and non-displaced workers from 5 years before to 7 years after displacement. We find that job displacement has a negative effect on the health of both men and women. Importantly, much of this effect is driven by an increase in smoking behavior. These results are robust to a variety of specification checks.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9276.

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Date of creation: Jan 2013
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Handle: RePEc:cpr:ceprdp:9276
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  1. Eliason, Marcus & Storrie, Donald, 2009. "Job loss is bad for your health - Swedish evidence on cause-specific hospitalization following involuntary job loss," Social Science & Medicine, Elsevier, vol. 68(8), pages 1396-1406, April.
  2. Bergemann, Annette & Grönqvist, Erik & Gudbjörnsdottir, Soffia, 2011. "The effects of job displacement on the onset and progression of diabetes," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48695, Verein für Socialpolitik / German Economic Association.
  3. William T. Gallo & Elizabeth H. Bradley & Stanislav V. Kasl, 2001. "The Effect of Job Displacement on Subsequent Health," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 159-165.
  4. Ruhm, Christopher J., 2005. "Healthy living in hard times," Journal of Health Economics, Elsevier, vol. 24(2), pages 341-363, March.
  5. Böckerman, Petri & Ilmakunnas, Pekka, 2007. "Unemployment and self-assessed health: Evidence from panel data," MPRA Paper 1798, University Library of Munich, Germany.
  6. Carneiro, Anabela & Portugal, Pedro, 2006. "Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set," IZA Discussion Papers 2289, Institute for the Study of Labor (IZA).
  7. Wachter, Till von & Bender, Stefan, 2004. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," IZA Discussion Papers 1348, Institute for the Study of Labor (IZA).
  8. Eliason, Marcus & Storrie, Donald, 2004. "The Echo of Job Displacement," Working Papers in Economics 135, University of Gothenburg, Department of Economics.
  9. Burda, Michael C. & Mertens, Antje, 1999. "Estimating wage losses of displaced workers in Germany," SFB 373 Discussion Papers 1999,35, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  10. Christopher J. Ruhm, 2000. "Are Recessions Good For Your Health?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 617-650, May.
  11. Browning, Martin & Heinesen, Eskil, 2012. "Effect of job loss due to plant closure on mortality and hospitalization," Journal of Health Economics, Elsevier, vol. 31(4), pages 599-616.
  12. Kate Strully, 2009. "Job loss and health in the U.S. labor market," Demography, Springer, vol. 46(2), pages 221-246, May.
  13. Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
  14. Jan Marcus, 2012. "Does Job Loss Make You Smoke and Gain Weight?," SOEPpapers on Multidisciplinary Panel Data Research 432, DIW Berlin, The German Socio-Economic Panel (SOEP).
  15. Kristiina Huttunen & Jarle Møen & Kjell G. Salvanes, 2011. "How Destructive Is Creative Destruction? Effects Of Job Loss On Job Mobility, Withdrawal And Income," Journal of the European Economic Association, European Economic Association, vol. 9(5), pages 840-870, October.
  16. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1265-1306, August.
  17. Tinna Laufey Ásgeirsdóttir & Hope Corman & Kelly Noonan & Þórhildur Ólafsdóttir & Nancy E. Reichman, 2012. "Are Recessions Good for Your Health Behaviors? Impacts of the Economic Crisis in Iceland," NBER Working Papers 18233, National Bureau of Economic Research, Inc.
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