Health and Labour Market Outcomes

The main objective of this project is to understand the effect of Health (Health outcomes) on the dynamics of the labour force and labour market outcomes. Western Economies are experiencing a rapid change in the demographic composition of the active labour force. We can think of this change as a direct effect of an ever increasing life expectancy and the implications this has on labour force composition, labour force participation and retirement decisions. However, advances in medical science and technology imply that certain health conditions are no longer an impediment for individuals to participate in paid labour market activities, either at the traditional prime age definition or beyond the traditional definition or retirement age. In all, it is important for policy makers to understand the interaction between economics, health and health status, and social factors that might affect both health and labour market decisions in the population.
Therefore it is important to use adequate econometric techniques to analyse informative data at the micro-level and understand the causal direction between labour market outcomes and health outcomes, as well as changes in the causality direction over the life cycle. The aim of this project is achieved by studying health outcomes and labour market outcomes allowing for different (objective and subjective) health measures, and differentials of these interactions over the life cycle of individuals. The project will employ both partial and general equilibrium models to understand the effect of health related global policies that might affect labour market outcomes in the population.

Discussion Papers:
Lechner, Michael; Vazquez-Alvarez, Rosalia (2003); The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching, CEPR Discussion Paper No. 4223
Vazquez-Alvarez, Rosalia (2008), Effects of the Onset of Health shocks on the retirement decision of European workers, University of St.Gallen working paper