Does Job Loss Cause Ill Health?

35 Pages Posted: 13 May 2009

See all articles by Martin Salm

Martin Salm

Tilburg University; IZA Institute of Labor Economics

Abstract

This study estimates the effect of job loss on health for near elderly employees based on longitudinal data from the Health and Retirement Study. Previous studies find a strong negative correlation between unemployment and health. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason ヨ the closure of their previous employers' business. I find that the unemployed are in worse health than employees, and that health reasons are a common cause of job termination. In contrast, I find no causal effect of exogenous job loss on various measures of physical and mental health. This suggests that the inferior health of the unemployed compared to the employed could be explained by reverse causality.

Keywords: job displacement, health, unemployment

JEL Classification: I12, J63

Suggested Citation

Salm, Martin, Does Job Loss Cause Ill Health?. IZA Discussion Paper No. 4147, Available at SSRN: https://ssrn.com/abstract=1402087 or http://dx.doi.org/10.2139/ssrn.1402087

Martin Salm (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

IZA Institute of Labor Economics

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

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