Firm Quality and Health Maintenance

We provide evidence on the impact of firm productivity on the health maintenance of employees. Using linked employer-employee administrative panel data supplemented with healthcare records from Hungary, we analyze the dynamics of healthcare use before and after moving to a new firm. We show that moving to a more productive firm leads to higher consumption of drugs for cardiovascular conditions and more physician visits, without evidence of deteriorating physical health, and, among older workers, to lower consumption of medications for mental health conditions. The results suggest that more productive firms have a beneficial effect on the detection of previously undiagnosed chronic illnesses and on the mental health of their employees. Plausible mechanisms include the higher quality of occupational health check-ups and less stressful job conditions.