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Health and Unemployment during Macroeconomic Crises

Author

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  • Prashant Bharadwaj
  • Petter Lundborg
  • Dan-Olof Rooth

Abstract

This paper shows that health is an important determinant of labor market vulnerability during large economic crises. Using data on adults during Sweden’s unexpected economic crisis in the early 1990s, we show that early and later life health are important determinants of job loss after the crisis, but not before. Adults who were born with worse health (proxied by birth weight) and those who experience hospitalizations (and especially so for mental health related issues) in the pre-crisis period, are much more likely to lose their jobs and go on unemployment insurance after the crisis. These effects are concentrated in the private sector that happened to be more affected by the crisis. The results hold while controlling for individual education and occupational sorting prior to the crisis, and for controlling for family level characteristics by exploiting health differences within twin pairs. We conclude that poor health (both in early life and as adults) is an important indicator of vulnerability during economic shocks.

Suggested Citation

  • Prashant Bharadwaj & Petter Lundborg & Dan-Olof Rooth, 2015. "Health and Unemployment during Macroeconomic Crises," NBER Working Papers 21353, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21353
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    References listed on IDEAS

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    1. Rajeev Dehejia & Adriana Lleras-Muney, 2004. "Booms, Busts, and Babies' Health," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 1091-1130.
    2. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 2001. "Do Benefit Cuts Boost Job Finding? Swedish Evidence from the 1990s," Economic Journal, Royal Economic Society, vol. 111(474), pages 766-790, October.
    3. Prashant Bharadwaj & Petter Lundborg & Dan-Olof Rooth, 2018. "Birth Weight in the Long Run," Journal of Human Resources, University of Wisconsin Press, vol. 53(1), pages 189-231.
    4. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1121-1167.
    5. J. Bound & Harry J. Holzer, "undated". "Structural changes, employment outcomes, and population adjustments among whites and blacks: 1980-1990," Institute for Research on Poverty Discussion Papers 1057-95, University of Wisconsin Institute for Research on Poverty.
    6. repec:pri:cheawb:adriana_booms is not listed on IDEAS
    7. Douglas Almond & Janet Currie, 2011. "Killing Me Softly: The Fetal Origins Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 153-172, Summer.
    8. Englund, Peter, 1999. "The Swedish Banking Crisis: Roots and Consequences," Oxford Review of Economic Policy, Oxford University Press, vol. 15(3), pages 80-97, Autumn.
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    Cited by:

    1. Schwandt, Hannes, 2017. "The Lasting Legacy of Seasonal Influenza: In-utero Exposure and Labor Market Outcomes," DaCHE discussion papers 2017:5, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    2. repec:eee:socmed:v:222:y:2019:i:c:p:305-314 is not listed on IDEAS

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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