IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp6121.html
   My bibliography  Save this paper

Socioeconomic Heterogeneity in the Effect of Health Shocks on Earnings: Evidence from Population-Wide Data on Swedish Workers

Author

Listed:
  • Lundborg, Petter

    (Lund University)

  • Nilsson, Martin

    (Uppsala University)

  • Vikström, Johan

    (IFAU)

Abstract

In this paper, we estimate socioeconomic heterogeneity in the effect of unexpected health shocks on labor market outcomes, using register-based data on the entire population of Swedish workers. We effectively exploit a Difference-in-Difference-in-Differences design, in which we compare the change in labor earnings across treated and control groups with high and low education levels. If the anticipation effects are similar for individuals with high and low education, any difference in the estimates across socioeconomic groups could plausibly be given a causal interpretation. Our results suggest a large amount of heterogeneity in the effects, in which individuals with a low education level suffer relatively more from a given health shock. These results hold across a wide range of different types of health shocks and become more pronounced with age. Our results suggest that socioeconomic heterogeneity in the effect of health shocks offers one explanation for how the socioeconomic gradient in health arises.

Suggested Citation

  • Lundborg, Petter & Nilsson, Martin & Vikström, Johan, 2011. "Socioeconomic Heterogeneity in the Effect of Health Shocks on Earnings: Evidence from Population-Wide Data on Swedish Workers," IZA Discussion Papers 6121, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6121
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp6121.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stewart, Jennifer M., 2001. "The impact of health status on the duration of unemployment spells and the implications for studies of the impact of unemployment on health status," Journal of Health Economics, Elsevier, vol. 20(5), pages 781-796, September.
    2. Regina T. Riphahn, 1999. "Income and employment effects of health shocks A test case for the German welfare state," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 363-389.
    3. Fredriksson, Peter & Johansson, Per, 2008. "Dynamic Treatment Assignment," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 435-445.
    4. van Kippersluis, Hans & Van Ourti, Tom & O'Donnell, Owen & van Doorslaer, Eddy, 2009. "Health and income across the life cycle and generations in Europe," Journal of Health Economics, Elsevier, vol. 28(4), pages 818-830, July.
    5. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    6. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    7. van Doorslaer, Eddy & Wagstaff, Adam & Bleichrodt, Han & Calonge, Samuel & Gerdtham, Ulf-G. & Gerfin, Michael & Geurts, Jose & Gross, Lorna & Hakkinen, Unto & Leu, Robert E., 1997. "Income-related inequalities in health: some international comparisons," Journal of Health Economics, Elsevier, vol. 16(1), pages 93-112, February.
    8. James Smith, 2004. "Unravelling the SES health connection," IFS Working Papers W04/02, Institute for Fiscal Studies.
    9. Disney, Richard & Emmerson, Carl & Wakefield, Matthew, 2006. "Ill health and retirement in Britain: A panel data-based analysis," Journal of Health Economics, Elsevier, vol. 25(4), pages 621-649, July.
    10. Fabrice Etilé & Carine Milcent, 2006. "Income‐related reporting heterogeneity in self‐assessed health: evidence from France," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 965-981, September.
    11. Doreen Wing Han Au & Thomas F. Crossley & Martin Schellhorn, 2005. "The effect of health changes and long‐term health on the work activity of older Canadians," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 999-1018, October.
    12. Scott Lynch, 2003. "Cohort and life-course patterns in the relationship between education and health: A hierarchical approach," Demography, Springer;Population Association of America (PAA), vol. 40(2), pages 309-331, May.
    13. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    14. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416, Elsevier.
    15. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    16. repec:hal:psewpa:halshs-00590524 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asad Islam & Jaai Parasnis, 2022. "Heterogeneous effects of health shocks in developed countries: Evidence from Australia," Southern Economic Journal, John Wiley & Sons, vol. 89(2), pages 471-495, October.
    2. Maria Cervini-Pla & Judit Vall Castelló, 2018. "The earnings and employment losses before entering the disability system," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1111-1128, November.
    3. Maria Cervini-Plá & Jose I. Silva & Judit Vall Castelló, 2016. "Estimating the income loss of disabled individuals: the case of Spain," Empirical Economics, Springer, vol. 51(2), pages 809-829, September.
    4. Oscar Erixson, 2017. "Health responses to a wealth shock: evidence from a Swedish tax reform," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1281-1336, October.
    5. Anton Nilsson, 2015. "Who suffers from unemployment? The role of health and skills," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-24, December.
    6. Justine Bondoux & Thomas Barnay & Thomas Renaud & Florence Jusot, 2021. "How Does Disability Affect Income? An Empirical Study on Older European Workers," Erudite Working Paper 2021-05, Erudite.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    2. Stefanie Schurer, 2008. "Discrete Heterogeneity in the Impact of Health Shocks on Labour Market Outcomes," Melbourne Institute Working Paper Series wp2008n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Issam Khelfaoui & Yuantao Xie & Muhammad Hafeez & Danish Ahmed & Houssem Eddine Degha & Hicham Meskher, 2022. "Effects of Health Shocks, Insurance, and Education on Income: Fresh Analysis Using CHNS Panel Data," IJERPH, MDPI, vol. 19(14), pages 1-17, July.
    4. van Kippersluis, Hans & Van Ourti, Tom & O'Donnell, Owen & van Doorslaer, Eddy, 2009. "Health and income across the life cycle and generations in Europe," Journal of Health Economics, Elsevier, vol. 28(4), pages 818-830, July.
    5. Schurer, Stefanie, 2014. "Bouncing Back from Health Shocks: Locus of Control, Labor Supply, and Mortality," IZA Discussion Papers 8203, Institute of Labor Economics (IZA).
    6. Andrew M. Jones & Eddy Van Doorslaer & Teresa Bago D’Uva & Silvia Balia & Lynn Gambin & Cristina Hernández Quevedo & Xander Koolman & Nigel Rice, 2006. "Health and Wealth: Empirical Findings and Political Consequences," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(s1), pages 93-112, May.
    7. repec:frd:wpaper:dp2023-01er:dp2023-01 is not listed on IDEAS
    8. Oliver Fritz & Peter Mayerhofer & Reinhard Haller & Gerhard Streicher & Florian Bachner & Herwig Ostermann, 2013. "Die regionalwirtschaftlichen Effekte der österreichischen Krankenanstalten," WIFO Studies, WIFO, number 46672.
    9. Johnston, David W. & Propper, Carol & Shields, Michael A., 2009. "Comparing subjective and objective measures of health: Evidence from hypertension for the income/health gradient," Journal of Health Economics, Elsevier, vol. 28(3), pages 540-552, May.
    10. Lindelow, Magnus & Wagstaff, Adam, 2005. "Health shocks in China : are the poor and uninsured less protected ?," Policy Research Working Paper Series 3740, The World Bank.
    11. Kim, Hoolda & Mitra, Sophie, 2022. "Dynamics of health and labor income in Korea," The Journal of the Economics of Ageing, Elsevier, vol. 21(C).
    12. Jones, Andrew M. & Rice, Nigel & Zantomio, Francesca, 2020. "Acute health shocks and labour market outcomes: Evidence from the post crash era," Economics & Human Biology, Elsevier, vol. 36(C).
    13. Schurer, Stefanie, 2017. "Bouncing back from health shocks: Locus of control and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 1-20.
    14. David Cantarero & Marta Pascual & Jose Maria Sarabia, 2004. "Can income inequality contribute to understand inequalities in health? An empirical approach based on the European Community Household Panel," ERSA conference papers ersa04p230, European Regional Science Association.
    15. Galama, Titus & Kapteyn, Arie, 2011. "Grossman’s missing health threshold," Journal of Health Economics, Elsevier, vol. 30(5), pages 1044-1056.
    16. Hernández-Quevedo, Cristina & Jones, Andrew M. & Rice, Nigel, 2008. "Persistence in health limitations: A European comparative analysis," Journal of Health Economics, Elsevier, vol. 27(6), pages 1472-1488, December.
    17. Pilar García-Gómez & Hans van Kippersluis & Owen O’Donnell & Eddy van Doorslaer, 2013. "Long-Term and Spillover Effects of Health Shocks on Employment and Income," Journal of Human Resources, University of Wisconsin Press, vol. 48(4), pages 873-909.
    18. Gimenez-Nadal, J. Ignacio & Molina, Jose Alberto, 2015. "Health status and the allocation of time: Cross-country evidence from Europe," Economic Modelling, Elsevier, vol. 46(C), pages 188-203.
    19. Teresa Bago d'Uva & Eddy Van Doorslaer & Maarten Lindeboom & Owen O'Donnell, 2008. "Does reporting heterogeneity bias the measurement of health disparities?," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 351-375, March.
    20. Pelgrin, Florian & St-Amour, Pascal, 2016. "Life cycle responses to health insurance status," Journal of Health Economics, Elsevier, vol. 49(C), pages 76-96.
    21. Richard Blundell & Jack Britton & Monica Costa Dias & Eric French, 2023. "The Impact of Health on Labor Supply near Retirement," Journal of Human Resources, University of Wisconsin Press, vol. 58(1), pages 282-334.

    More about this item

    Keywords

    health; health shocks; socioeconomic status; life-cycle;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6121. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.