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Be healthy, be employed: A comparison between the US and France based on a general equilibrium model

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  • Xavier Fairise
  • Fran ois Langot
  • Ze Zhong Shang

Abstract

Does health differences between the US and France come from unemployment risk gaps? A general equilibrium model à la Aiyagari (1994) augmented by investments in health à la Grossman (1972) is used to analyze the market allocations of two particular economies: the US and France. The US are characterized by low unemployment risk, associated to low unemployment insurance. The turnover in the US is larger than in France. We show that expenditures in health are strongly related to the labor market turnover leading the American to perceived their employment spells as a more risky events, therefore reducing their incentives to invest in health. This contributes to explain the poorer health of the Americans than French.
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  • Xavier Fairise & Fran ois Langot & Ze Zhong Shang, 2018. "Be healthy, be employed: A comparison between the US and France based on a general equilibrium model," TEPP Working Paper 2018-15, TEPP.
    • Handle: RePEc:tep:teppwp:wp18-15
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