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Does Job Loss Cause Ill Health?

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  • Salm, Martin

    () (Tilburg University)

Abstract

This study estimates the effect of job loss on health for near elderly employees based on longitudinal data from the Health and Retirement Study. Previous studies find a strong negative correlation between unemployment and health. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason – the closure of their previous employers' business. I find that the unemployed are in worse health than employees, and that health reasons are a common cause of job termination. In contrast, I find no causal effect of exogenous job loss on various measures of physical and mental health. This suggests that the inferior health of the unemployed compared to the employed could be explained by reverse causality.

Suggested Citation

  • Salm, Martin, 2009. "Does Job Loss Cause Ill Health?," IZA Discussion Papers 4147, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4147
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    References listed on IDEAS

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    1. Melvin Stephens, 2004. "Job Loss Expectations, Realizations, and Household Consumption Behavior," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 253-269, February.
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    12. Marcus Eliason & Donald Storrie, 2009. "Does Job Loss Shorten Life?," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
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    More about this item

    Keywords

    unemployment; job displacement; health;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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