Bouncing Back from Health Shocks: Locus of Control, Labor Supply, and Mortality

Stefanie Schurer ()
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Stefanie Schurer: University of Sydney

No 8203, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Policy-makers worldwide are embarking on school programmes aimed at boosting students' resilience. One facet of resilience is a belief about cause and effect in life, locus of control. I test whether positive control beliefs work as a psychological buffer against health shocks in adulthood. To identify behavioural differences in labour supply, I focus on a selected group of full-time employed men of working age and similar health. Men with negative control beliefs, relative to men with positive beliefs, are 230-290% more likely to work part-time or drop out of the labour market after a health shock. In old age men with negative control beliefs are by a factor of 2.7 more likely to die after a health shock. The heterogeneous labour supply responses are also observed for other non-cognitive skills, but only for the ones which correlate with control beliefs. Interventions aimed at correcting inaccurate beliefs and negative perceptions may be a low-cost tool to moderate rising public expenditures on social protection and health care.

Keywords: non-cognitive skills; locus of control; labor supply; mortality; health shocks; SOEP (search for similar items in EconPapers)
JEL-codes: I12 J24 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2014-05
New Economics Papers: this item is included in nep-cbe, nep-hea, nep-lab, nep-lma and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published - published in: Journal of Economic Behavior and Organization,133, 1-20, 2017

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