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The Public Health Costs of Job Loss

  • Kuhn, Andreas

    ()

    (Swiss Federal Institute for Vocational Education and Training)

  • Lalive, Rafael

    ()

    (University of Lausanne)

  • Zweimüller, Josef

    ()

    (University of Zurich)

We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem of deteriorating health leading to job loss as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis is based on a rich data set from Austria providing comprehensive information on various types of health care costs and day-by-day work history at the individual level. Our central findings are: (i) overall expenditures on medical treatments (hospitalizations, drug prescriptions, doctor visits) are not strongly affected by job displacement; (ii) job loss increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women); and (iii) sickness benefits strongly increase due to job loss.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4355.

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Length: 42 pages
Date of creation: Aug 2009
Date of revision:
Publication status: published in: Journal of Health Economics, 2009, 28(6), 1099-1115
Handle: RePEc:iza:izadps:dp4355
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