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Heterogeneity in the Impact of Health Shocks on Labor Outcomes: Evidence from Swedish Workers

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Author

Summary, in English

This article provides new evidence on heterogeneity in the impact of health shocks by using register-based data on the entire population of Swedish workers. We formulate a difference-in-difference design, where we compare the change in labour earnings across matched workers with a high and low level of education who experience the same type of health shocks. Our results suggest major heterogeneity in the effects, where a given health shock has a greater relative negative impact on low-skilled individuals/individuals with a low level of education. These results hold across different types of health shocks and become more pronounced with age. Low-skilled workers are also more likely to leave the labour force and receive disability insurance, sickness insurance, and unemployment benefits following a health shock. Our results suggest that heterogeneity in the effect of health shocks offers one explanation as to how the educational gradient in health arises.

Publishing year

2015

Language

English

Pages

715-739

Publication/Series

Oxford Economic Papers

Volume

67

Issue

3

Document type

Journal article

Publisher

Oxford University Press

Topic

  • Economics and Business

Status

Published

ISBN/ISSN/Other

  • ISSN: 1464-3812