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Bouncing Back from Health Shocks: Locus of Control, Labor Supply, and Mortality

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  • Schurer, Stefanie

    () (University of Sydney)

Abstract

Policy-makers worldwide are embarking on school programmes aimed at boosting students' resilience. One facet of resilience is a belief about cause and effect in life, locus of control. I test whether positive control beliefs work as a psychological buffer against health shocks in adulthood. To identify behavioural differences in labour supply, I focus on a selected group of full-time employed men of working age and similar health. Men with negative control beliefs, relative to men with positive beliefs, are 230-290% more likely to work part-time or drop out of the labour market after a health shock. In old age men with negative control beliefs are by a factor of 2.7 more likely to die after a health shock. The heterogeneous labour supply responses are also observed for other non-cognitive skills, but only for the ones which correlate with control beliefs. Interventions aimed at correcting inaccurate beliefs and negative perceptions may be a low-cost tool to moderate rising public expenditures on social protection and health care.

Suggested Citation

  • Schurer, Stefanie, 2014. "Bouncing Back from Health Shocks: Locus of Control, Labor Supply, and Mortality," IZA Discussion Papers 8203, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8203
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    References listed on IDEAS

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    Cited by:

    1. Warn N. Lekfuangfu & Francesca Cornaglia & Nattavudh Powdthavee & Nele Warrinnier, 2014. "Locus of Control and Its Intergenerational Implications for Early Childhood Skill Formation," LICOS Discussion Papers 35314, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Mendolia, Silvia & Walker, Ian, 2014. "The effect of personality traits on subject choice and performance in high school: Evidence from an English cohort," Economics of Education Review, Elsevier, vol. 43(C), pages 47-65.
    3. Buddelmeyer, Hielke & Powdthavee, Nattavudh, 2016. "Can having internal locus of control insure against negative shocks? Psychological evidence from panel data," Journal of Economic Behavior & Organization, Elsevier, vol. 122(C), pages 88-109.
    4. Decker, Simon & Schmitz, Hendrik, 2016. "Health shocks and risk aversion," Journal of Health Economics, Elsevier, vol. 50(C), pages 156-170.
    5. Silvia Mendolia & Ian Walker, 2015. "Youth unemployment and personality traits," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-26, December.
    6. Silvia Mendolia & Ian Walker, 2014. "The effect of personality traits on subject choice and performance in high school," Working Papers 64907361, Lancaster University Management School, Economics Department.
    7. Mendolia, Silvia & Walker, Ian, 2014. "Do NEETs Need Grit?," IZA Discussion Papers 8740, Institute for the Study of Labor (IZA).
    8. Silvia Mendolia & Ian Walker, 2015. "Youth unemployment and the effect of personality traits," Working Papers 84097960, Lancaster University Management School, Economics Department.

    More about this item

    Keywords

    non-cognitive skills; locus of control; labor supply; mortality; health shocks; SOEP;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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