Health and Unemployment During Macroeconomic Crises

57 Pages Posted: 13 Jul 2015 Last revised: 7 May 2023

See all articles by Prashant Bharadwaj

Prashant Bharadwaj

University of California, San Diego (UCSD) - Department of Economics

Petter Lundborg

Tinbergen Institute; Lund University School of Economics and Management; IZA Institute of Labor Economics

Dan-Olof Rooth

University of Kalmar; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2015

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.

Suggested Citation

Bharadwaj, Prashant and Lundborg, Petter and Lundborg, Petter and Rooth, Dan-Olof, Health and Unemployment During Macroeconomic Crises (July 2015). NBER Working Paper No. w21353, Available at SSRN: https://ssrn.com/abstract=2629960

Prashant Bharadwaj (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

Petter Lundborg

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Lund University School of Economics and Management ( email )

P.O Box 7080
Lund
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Dan-Olof Rooth

University of Kalmar ( email )

Sweden

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
15
Abstract Views
362
PlumX Metrics