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Health and Wages - Panel data estimates considering selection and endogeneity

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  • Jäckle, Robert
  • Himmler, Oliver

Abstract

This paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity, sample selection, and endogeneity in one comprehensive framework. Using data from the German Socio-Economic Panel (GSOEP) we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary. Good health leads to higher wages for men, while there appears to be no significant effect for women. Contingent on the method of estimation, healthy males are estimated to earn between 1.3% and 7.8% more than those in poor health.

Suggested Citation

  • Jäckle, Robert & Himmler, Oliver, 2007. "Health and Wages - Panel data estimates considering selection and endogeneity," MPRA Paper 11578, University Library of Munich, Germany, revised Nov 2008.
  • Handle: RePEc:pra:mprapa:11578
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    References listed on IDEAS

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    More about this item

    Keywords

    health; wages; fixed effects; sample selection; instrumental variables;
    All these keywords.

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I1 - Health, Education, and Welfare - - Health

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