Health Shocks, Disability and Work

Posted: 22 Jun 2007

See all articles by Maarten Lindeboom

Maarten Lindeboom

Vrije Universiteit Amsterdam; Tinbergen Institute Amsterdam; IZA Institute of Labor Economics

Bas van der Klaauw

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Date Written: June 2007

Abstract

This paper focuses on the relation between the onset of disability and employment outcomes. We develop an event history model that includes accidents as a measure for unanticipated health shocks and estimate the model on data from the British National Child Development Study (NCDS). We show that experiencing such a health shock increases the likelihood of an onset of a disability by around 138%. However, health shocks are relatively rare events and therefore the larger part of observed disability rates result from gradual deteriorations in health. We find no direct effect of health shocks on employment outcomes. Using the health shock as an instrumental variable shows that the onset of a disability at age 25 causally reduces the employment rate at age 40 with around 21 percentage points. The effect is stronger for males and for workers with a higher Socio-economic background.

Keywords: disability, work, health shock, causal effect

JEL Classification: I12

Suggested Citation

Lindeboom, Maarten and van der Klaauw, Bas, Health Shocks, Disability and Work (June 2007). iHEA 2007 6th World Congress: Explorations in Health Economics Paper, Available at SSRN: https://ssrn.com/abstract=994851

Maarten Lindeboom (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6033 (Phone)
+31 20 444 6020 (Fax)

Tinbergen Institute Amsterdam

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

IZA Institute of Labor Economics

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

Bas Van der Klaauw

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6120 (Phone)
+31 20 444 6005 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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