HEALTH, HEALTH INSURANCE AND THE LABOR MARKET

This chapter provides an overview of some of the literature linking health and labor market behavior and suggests that health has a pervasive effect on most outcomes of interest to labor economists including wages, earnings, labor force participation, hours worked, retirement, job turnover, and benefits packages.

Abstract

This chapter provides an overview of the literature linking health, health insurance and labor market outcomes such as wages, earnings, employment, hours, occupational choice, job turnover, retirement, and the structure of employment. The first part of the paper focuses on the relationship between health and labor market outcomes. The empirical literature surveyed suggests that poor health reduces the capacity to work and has substantive effects on wages, labor force participation and job choice. The exact magnitudes, however, are sensitive to both the choice of health measures and to identification assumptions. The second part of the paper considers the link between health insurance and labor market outcomes. The empirical literature here suggests that access to health insurance has important effects on both labor force participation and job choice; the link between health insurance and wages is less clear.