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Health and work in the family: Evidence from spouses’ cancer diagnoses

Sung-Hee Jeon () and R. Vincent Pohl ()

Journal of Health Economics, 2017, vol. 52, issue C, 1-18

Abstract: Using Canadian administrative data from multiple sources, we provide the first nationally representative estimates for the effect of spouses’ cancer diagnoses on individuals’ employment and earnings and on family income. Our identification strategy exploits unexpected health shocks and combines matching with individual fixed effects in a generalized difference-in-differences framework to control for observable and unobservable heterogeneity. While the effect of spousal health shocks on labor supply is theoretically ambiguous, we find strong evidence for a decline in employment and earnings of individuals whose spouses are diagnosed with cancer. We interpret this result as individuals reducing their labor supply to provide care to their sick spouses and to enjoy joint leisure. Family income substantially declines after spouses’ cancer diagnoses, suggesting that the financial consequences of such health shocks are considerable.

Keywords: Health shocks; Spousal cancer diagnosis; Spousal employment; Spousal earnings (search for similar items in EconPapers)
JEL-codes: I10 J12 J17 J22 (search for similar items in EconPapers)
Date: 2017
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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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