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

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.

Employee Health and Employer Incentives

SSRN Electronic Journal, 2000

Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Three essays in labor and health economics

This Dissertation is primarily focused on the study of U.S. workforce trends. Research over the past fifty years, with respect to the choices that individuals make in terms of maximizing their own well-being, has covered several areas. Additionally, the legal climate has changed dramatically over this time period and research in this area has covered the possible effects on economic outcomes, including an individual's well-being. The first essay focuses on the trend in trade union membership in the U.S. over the last few decades. We revisit what is known as the government substitution hypothesis which basically addresses the question of why trade union membership has fallen on average for more than 50 years. We use an updated data set, which includes state level data over time. Additionally, we have developed what we consider more appropriate measures of government provided services that might be perceived by employees as substitutable for the services that unions normally provide. After testing for and finding support to use the fixed effects model, we find evidence that supports the government substitution hypothesis.

Performance-Related Pay and Objective Measures of Health after Correcting for Sample Selection

Social Science Research Network, 2022

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Interactions of Work and Health: An Economic Perspective

Handbook of Socioeconomic Determinants of Occupational Health, 2020

A growing part of empirical microeconomics papers studies the interaction between employment and health. This literature tries to disentangle the twoway causal relationship. On one hand, the health status influences the employment position and, at the same time, working affects, positively or negatively, the health status. The literature concludes that a favorable work environment and high job security lead to better health conditions. Being employed with appropriate working conditions plays a protective role on physical health and psychiatric disorders. By contrast, nonemployment and retirement are generally worse particularly for mental health in reference to employment. In addition, overemployment has a negative effect on health. These findings stress the importance

Low Wages as Occupational Health Hazards

Journal of occupational and environmental medicine / American College of Occupational and Environmental Medicine, 2016

The history of occupational medicine has been characterized by ever-widening recognition of hazards, from fires in 1911 to asbestos in the 1960s, to job strain in the 1990s. In this essay, we argue for broadening the recognition further to include low wages. We first review possible mechanisms explaining the effects of wages on health or health behaviors. Mechanisms involve self-esteem, job satisfaction, deprivation, social rank, the "full" price of bad health, patience, and the ability to purchase health-producing goods and services. Second, we discuss empirical studies that rely on large, typically national, data sets and statistical models that use either instrumental variables or natural experiments and also account for other family income. Finally, we draw implications for laws governing minimum wages and labor unions.

The impact of health on wages: Evidence from the British Household Panel Survey

Empirical Economics, 2001

While income is generally considered an important determinant of health, little evidence has been o¨ered on the reverse relationship, particularly for developed economies. This paper considers the e¨ect of self-assessed general and psychological health on hourly wages using longitudinal data from six waves of the British Household Panel Survey. We employ single equation ®xed e¨ects and random e¨ects instrumental variable estimators suggested by , . Our results show that reduced psychological health reduces the hourly wage for males, while excellent self-assessed health increases the hourly wage for females. We also ®nd the health variables to be positively correlated with the time-invariant individual e¨ect. Further, we con®rm the ®ndings of previous work which suggested that the majority of the e½ciency gains from the use of the instrumental variables estimators fall on the time-invariant endogenous variables, in our case academic attainment, and add further support to the hypothesis of a negative correlation between educational attainment and individual characteristics which a¨ect wages.

The Labor Market Value of Health Improvements

Forum for Health Economics & Policy, 2000

We analyze the value to the labor force of improvements in survival and health over the years 1970 to 1999. We find that survival gains and reductions in the number of work-days missed due to poor health have added about 8 percent to the remaining labor force value of black males, and about the same to the value of 60 year-old white males. This is almost as large an effect as a full year of schooling. Gains for younger white males appear to be approximately 5%, and gains for women are around 2%. Overall, health improvements have added $1.5 trillion to the value of labor market human capital over this period.

The public health costs of job loss

2009

Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.