The impact of health on wages: Evidence from the British Household Panel Survey (original) (raw)

Gender differences in the effect of health on wages in Britain

The impact of income and earnings on health has been well-examined in the health economics literature while the impact of health on wages has been less studied. Even rarer in previous work is the possible difference between the influences of health on wages for men versus women. In this paper, I attempt to fill this apparent gap in the literature. I augment the well-established earnings function to include a number of health indicators and estimate equations for men and women using eleven waves of the British Household Panel Survey. I consider a range of estimation procedures, including pooled ordinary least squares, random and fixed effects, and Hausman-Taylor instrumental variables approaches. The impact of health is found to differ slightly by sex and is more strongly related to women's wages more than men's.

The impact of health on wages: evidence for Europe

The European Journal of Health Economics

This paper analyses the effects of health on wages in sixteen European countries using production frontier methodology. It is assumed that workers have a potential income/productivity which basically depends on their human capital, but due to several health problems, situations could exist where workers fail to reach their potential income frontier. The estimation of a true-random-effects model allows us to conclude that the potential hourly wage of workers is significantly influenced by their level of education and their job experience. However, health problems, especially those strongly influencing work activities, contribute towards an individual not attaining the potential income which would otherwise be guaranteed by their human capital endowment. Suffering a strong limitation reduces gross wage per hour by 6.1%. This wage reduction is also observed in the case of a weak limitation, but here the wage difference with respect to workers without any limitation is 2.6%. Additionally, other factors, such as being a woman, the economic cycle or having a temporary contract, appear to distance an individual from their wage frontier.

Addressing endogeneity in the relationship between health and employment through a simultaneous equations model

Universidad Colegio Mayor Nuestra Senora Del Rosario Universidad Del Rosario Edocur Repositorio Institucional Disponible En Http Repository Urosario Edu Co, 2012

This document examines the two-way relationship between health and employment and their dynamics using U.S. data from the PSID (Panel study of Income Dynamics). This study uses two dependent variables (Self-assessed health and Employment) which are estimated using a bivariate probit model to address the endogeneity problem present between them. The results show that there is a significant evidence of the existence of endogeneity and suggest that good health positively affects the probability of being employed (healthy people have 2.85% more chances to join the labour force than unhealthy people) and that there is a positive impact of being employed on the probability of reporting good health (employees have 0,07% more chances of being healthy than non-employees), however, the effect of employment status on health is found not significant.

Unemployment and self‐assessed health: evidence from panel data

Health Economics, 2007

We analyse the relationship between unemployment and self-assessed health using the European Community Household Panel (ECHP) for Finland over the period 1996-2001. Our results reveal that the event of becoming unemployed does not matter as such for self-assessed health. The health status of those that end up being unemployed is lower than that of the continually employed. Hence, persons who have poor health are being selected for the pool of the unemployed. This explains why, in a cross-section, unemployment is associated with poor self-assessed health. However, we are somewhat more likely to obtain the negative effects of unemployment on health when long-term unemployment is used as the measure of unemployment experience.

The impact of health on employment, wages, and hours worked over the life cycle

The Quarterly Review of Economics and Finance, 2004

This paper examines the effect of health problems on employment, annual hours worked and hourly wages. The Health and Retirement Study data are used to compile employment and health experience profiles over the lifetimes of respondents. These profiles are used to estimate the impact of temporary and permanent illnesses. Permanent health conditions have negative effects on labor market outcomes. Females are found to have larger reductions in wages, but males have bigger decreases in hours worked. The onset of health problems in the 40s produces the largest negative consequences for males, while for females negative effects peak in the 30s.

Relation between health and wages in Turkey

Panoeconomicus, 2019

The purpose of this study is to estimate the effects of health on the hourly wages of women and men in Turkey by using panel data. The data are used to estimate the earning function, where the natural logarithm of hourly wage is the function of individual characteristics, including health. This work complements previous studies by using a panel in which the education variable, measured by the degree obtained, varies over time and therefore it can be estimated through the within estimator. One of the most important observations of this study is that very good and/or good self-assessed health status has a positive effect on wages more for women than for men. Another important finding is that of significant difference in the rate of return to education, which is higher for women than for men.

Health and Wages: Instrumental Variables Estimates for a Panel of Chinese Workers

2005

We consider the e¤ect of anthropometric measures, such as height and body mass index (BMI), on the wages of a panel of workers from the 1991 and 1993 China Health and Nutrition Surveys. We implement an estimator that simultaneously corrects for correlated individual e¤ects and selection bias (Wooldridge, 1995), as well as a pairwise di¤erencing estimator that also allows one to account for endogeneity (Kyriazidou, 1997). Our preferred speci…cation implies that there are signi…cant returns to health that are re ‡ected in wages, and that careful consideration of inter-cohort di¤erences may be a key factor in obtaining sensible IV estimates of the returns to education in China.

The Impacts of Mental Health Problems on Wages Using the Instrumental Variable Approach, Case of Selected Countries in the European Community Household Panel (ECHP) Data Set

ERN: Behavioral Economics (Topic), 2020

The study investigated the impacts of mental health problems or disorders on wages using the instrumental variable approach. The European Community Household Panel (ECHP) data set of some selected European Countries for two years (2000 and 2001) was used. The study was theoretically justified by the human capital theory propounded by Becker which encapsulates the conceptualization of health capital. The data set was managed and finally reduced to 51,746 observations. The econometric models used include the Ordinary Least Square (OLS), the Instrumental Variable Effect (IV), and the Heckman models. The Ordinary Least Square (OLS) result indicates that those with mental illness will have 6.7% fewer earnings relative to those with no such conditions. The instrumental variable result shows that those with mental health disorders will earn 14.8% less than those without such conditions. The study can conclude that the instrumental variable effect actually accounted for the indirect effect ...

Health and the Wage: Cause, Effect, Both, or Neither? New Evidence on an Old Question

2018

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Mechanisms Linking Employment Type and Health: Panel Data Analysis with Fixed-Effects Models

Health and Social Welfare Review, 2019

Using twelve waves of data from the Korean Welfare Panel Study (2006-2017), we evaluate mechanisms linking employment type to various health outcomes, including depression, self-esteem, and self-rated health with a focus on differences between standard and other types of employment. Guided by prior research, we examine several mechanisms such as economic insecurity and psychosocial stressors, using fixed-effects models that control for unobserved time-invariant individual heterogeneity. Our findings confirm the importance of selection in that much of the association between employment type and health observed in simple cross-sectional OLS models loses significance in fixed-effects models. We also find supporting evidence for the mediating role of economic insecurity and psychosocial stressors. For instance, the lower levels of satisfaction in job and life conditions help explain lower self-esteem of male nonstandard workers relative to standard workers. It is also interesting that the hypothesized mediators often suppress the relationship between employment status and health in which a significant relationship is revealed only when the specific mediator is taken into account. Findings of this study will shed valuable insights on the pathways in which specific employment types affect men's and women's health outcomes.