Health and Unemployment during Macroeconomic Crises

Prashant Bharadwaj (), Petter Lundborg and Dan-Olof Rooth
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Prashant Bharadwaj: University of California, San Diego

No 9174, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper shows that health is an important determinant of labor market vulnerability during large economic crises. Using data on adults during Sweden's unexpected economic crisis in the early 1990s, we show that early and later life health are important determinants of job loss after the crisis, but not before. Adults who were born with worse health (proxied by birth weight) and those who experience hospitalizations (and especially so for mental health related issues) in the pre-crisis period, are much more likely to lose their jobs and go on unemployment insurance after the crisis. These effects are concentrated in the private sector that happened to be more affected by the crisis. The results hold while controlling for individual education and occupational sorting prior to the crisis, and for controlling for family level characteristics by exploiting health differences within twin pairs. We conclude that poor health (both in early life and as adults) is an important indicator of vulnerability during economic shocks.

Keywords: early life; birth weight; economic crises; shocks; unemployment (search for similar items in EconPapers)
JEL-codes: E32 I10 I18 J65 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2015-07
New Economics Papers: this item is included in nep-dem, nep-hea, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published as "Birth weight and vulnerability to a macroeconomic crisis": Journal of Health Economics, 2019, 66, 136-144.

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Working Paper: Health and Unemployment during Macroeconomic Crises (2015)
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