The effect of health on earnings: Quasi-experimental evidence from commuting accidents

Martin Halla and Martina Zweimüller

Labour Economics, 2013, vol. 24, issue C, 23-38

Abstract: This paper interprets accidents occurring on the way to and from work as negative health shocks to identify the causal effect of health on labor market outcomes. We argue that in our sample of exactly matched injured and non-injured workers, these health shocks (predominantly impairments in the musculoskeletal system) are quasi-randomly assigned. A fixed-effects difference-in-differences approach estimates a negative and persistent effect on subsequent employment and earnings. After initial periods with a higher incidence of sick leave, injured workers are more likely to be unemployed, and a growing share of them leave the labor market via disability retirement. Injured workers who manage to stay in employment incur persistent earnings losses. The effects are somewhat stronger for sub-groups of workers who are typically less attached to the labor market.

Keywords: Health; Employment; Earnings (search for similar items in EconPapers)
JEL-codes: D31 I10 J22 J24 J26 J28 J31 J64 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:24:y:2013:i:c:p:23-38

DOI: 10.1016/j.labeco.2013.04.006

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