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The Effect of Health on Income: Quasi-Experimental Evidence from Commuting Accidents

Author

Listed:
  • Martin Halla
  • Martina Zweimüller
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 treated and control workers, these health shocks are quasi-randomly assigned. A fixed-effects difference-in-differences approach estimates a negative and persistent effect on subsequent employment and income. After initial periods with a higher incidence of sick leave, treated workers are more likely unemployed, and a growing share of them leaves the labor market via disability retirement. Those treated workers, who manage to stay in employment, incur persistent income losses. The effects are stronger for sub-groups of workers who are typically less attached to the labor market.

Suggested Citation

  • Martin Halla & Martina Zweimüller, 2011. "The Effect of Health on Income: Quasi-Experimental Evidence from Commuting Accidents," Economics working papers 2011-04, Department of Economics, Johannes Kepler University Linz, Austria, revised Feb 2012.
    • Handle: RePEc:jku:econwp:2011_04
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    File URL: http://www.econ.jku.at/papers/2011/wp1104.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

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    2. Emmanuel Duguet & Christine Le Clainche, 2014. "The Effect of Non-Work Related Health Events on Career Outcomes: An Evaluation in the French Labor Market," Revue d'économie politique, Dalloz, vol. 124(3), pages 437-465.
    3. Maria Cervini-Plá & Jose I. Silva & Judit Vall Castelló, 2016. "Estimating the income loss of disabled individuals: the case of Spain," Empirical Economics, Springer, vol. 51(2), pages 809-829, September.
    4. David M. Zimmer, 2015. "Employment Effects Of Health Shocks: The Role Of Fringe Benefits," Bulletin of Economic Research, Wiley Blackwell, vol. 67(4), pages 346-358, October.
    5. Henna Busk & Christine Dauth & Elke J. Jahn, 2017. "Do Changes in Regulation Affect Temporary Agency Workers’ Job Satisfaction?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(3), pages 514-544, July.
    6. Romem, Issi & Shurtz, Ity, 2016. "The accident externality of driving: Evidence from observance of the Jewish Sabbath in Israel," Journal of Urban Economics, Elsevier, vol. 96(C), pages 36-54.
    7. Titus J. Galama & Hans van Kippersluis, 2013. "Health Inequalities through the Lens of Health-Capital Theory: Issues, Solutions, and Future Directions," Research on Economic Inequality, in: Health and Inequality, volume 21, pages 263-284, Emerald Group Publishing Limited.
    8. Alexander Ahammer & G. Thomas Horvath & Rudolf Winter-Ebmer, 2017. "The effect of income on mortality—new evidence for the absence of a causal link," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 180(3), pages 793-816, June.
    9. ZHAO Meng (KONISHI Moe), 2017. "Health-Related Income Gaps and the Effectiveness of Redistributive Policies in Japan," Discussion papers 17039, Research Institute of Economy, Trade and Industry (RIETI).
    10. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    11. Pilar Garcia-Gomez & Hans van Kippersluis & Owen O'Donnell & Eddy van Doorslaer, 2011. "Effects of Health on Own and Spousal Employment and Income using Acute Hospital Admissions," Tinbergen Institute Discussion Papers 11-143/2, Tinbergen Institute.

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    More about this item

    Keywords

    Health; employment; income;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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