The impact of health on wages: Evidence from the British Household Panel Survey

Nigel Rice and Paul Contoyannis ()

Empirical Economics, 2001, vol. 26, issue 4, 599-622

Abstract: While income is generally considered an important determinant of health, little evidence has been offered on the reverse relationship, particularly for developed economies. This paper considers the effect of self-assessed general and psychological health on hourly wages using longitudinal data from six waves of the British Household Panel Survey. We employ single equation fixed effects and random effects instrumental variable estimators suggested by Hausman and Taylor (1981), Amemiya and MaCurdy (1986), and Breusch, Mizon and Schmidt (1989). Our results show that reduced psychological health reduces the hourly wage for males, while excellent self-assessed health increases the hourly wage for females. We also find the health variables to be positively correlated with the time-invariant individual effect. Further, we confirm the findings of previous work which suggested that the majority of the efficiency gains from the use of the instrumental variables estimators fall on the time-invariant endogenous variables, in our case academic attainment, and add further support to the hypothesis of a negative correlation between educational attainment and individual characteristics which affect wages.

Keywords: Self-assessed health; mental health; wages; panel data; instrumental variables (search for similar items in EconPapers)
JEL-codes: C1 I1 (search for similar items in EconPapers)
Date: 2001-12-05
Note: received: January 2000/Final version received: October 2000
References: Add references at CitEc
Citations: View citations in EconPapers (79)

Downloads: (external link)
http://link.springer.de/link/service/journals/00181/papers/1026004/10260599.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:26:y:2001:i:4:p:599-622

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().