The effect of a minor health shock on labor market outcomes: The case of concussions

Florian Fouquet (), Lisa Meehan, Gail Pacheco and Alice Theadom
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Florian Fouquet: GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université
Lisa Meehan: New Zealand Policy Research Institute
Gail Pacheco: New Zealand Policy Research Institute
Alice Theadom: Traumatic Brain Injury Network

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Abstract: The literature on health shocks finds that minor injuries have only short‐term labor market impacts. However, mild traumatic brain injuries (mTBIs, commonly referred to as concussions) may be different as the medical literature highlights that they can have longer‐term health and cognitive effects. Moreover, TBIs are one of the most common causes of disability globally, with the vast majority being mild. Thus, it is important to understand the impact of mTBIs on labor market outcomes. We use administrative data on all medically‐diagnosed mild traumatic brain injuries (mTBIs) in New Zealand linked to monthly tax records to examine the labor market effects of a mTBI. We use a comparison group of those who suffer a mTBI at a later date to overcome potential endogeneity issues, and employ a doubly‐robust difference‐in‐differences method. We find that suffering a mTBI has negative labor market effects. Rather than dissipating over time, these negative effects grow, representing a decrease in employment of 20 percentage points and earning losses of about a third after 48 months. Our results highlight the need for timely diagnosis and treatment to mitigate the effect of mTBIs to reduce economic and social costs.

Keywords: health shock; labor market outcomes; mild traumatic brain injury (search for similar items in EconPapers)
Date: 2024-09-18
Note: View the original document on HAL open archive server: https://hal.science/hal-04705673v1
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Published in Health Economics, In press, ⟨10.1002/hec.4897⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04705673

DOI: 10.1002/hec.4897

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