The Health Effects of Unemployment on the European Elderly: An Application of Finite Mixture Models Using the Survey of Health, Aging and Retirement in Europe

39 Pages Posted: 13 Aug 2019

See all articles by Thang T. Vo

Thang T. Vo

University of Economics Ho Chi Minh City - School of Economics

Raghbendra Jha

Australian National University (ANU) - Australia South Asia Research Centre (ASARC); Crawford School of Public Policy

Multiple version iconThere are 2 versions of this paper

Date Written: August 10, 2019

Abstract

Using panel data extracted from wave 1, 2, 4, 5 and 6 of the Survey of Health, Ageing and Retirement in Europe, this paper investigates the impact of unemployment on health outcomes of the European elderly during the period 2004 to 2015. Various estimators with panel fixed-effects are employed to control for the time-invariant unobserved confounders. To eliminate selection bias, the study separates the impacts of plant closures and being laid off from other potentially endogenous reasons for unemployment. Most importantly, finite mixture models are used to account for unobserved heterogeneity. Results from the models using a dummy for unemployment show significant impacts on self-rated health, chronic disease, and mental health. Models with plant closures and being laid off as two exogenous variables confirm the similar impacts on mental health. The impacts of plant closures and being laid off are slightly higher for chronic disease, but only being laid off worsens self-rated health. Notably, women are more likely to get chronic disease when they lose their jobs by plant closures, even once a year. Unemployment also damages women's mental health but the marginal effects for men are even larger. The finite-mixture models separately estimate the health impacts on two latent classes and show that members of the class with more ex-post ill-health tend to suffer more health problems due to unemployment. Age, marriage, number of children, education and industry sectors jointly determine the class membership.

Keywords: finite mixture models, fixed effects, unemployment, health, the elderly, SHARE

JEL Classification: I15, I18, J14, J65, O52

Suggested Citation

Vo, Thang Tat and Jha, Raghbendra, The Health Effects of Unemployment on the European Elderly: An Application of Finite Mixture Models Using the Survey of Health, Aging and Retirement in Europe (August 10, 2019). Available at SSRN: https://ssrn.com/abstract=3341372 or http://dx.doi.org/10.2139/ssrn.3341372

Thang Tat Vo (Contact Author)

University of Economics Ho Chi Minh City - School of Economics ( email )

1A Hoang Dieu, Phu Nhuan
Ho Chi Minh City, Ho Chi Minh City
Vietnam

Raghbendra Jha

Australian National University (ANU) - Australia South Asia Research Centre (ASARC) ( email )

Canberra, Australian Capital Territory 0200
Australia
+61 2 6125 2683 (Phone)
+61 2 6125 0443 (Fax)

HOME PAGE: http://crawford.anu.edu.au/crawford_people/content/staff/acde/rjha.php

Crawford School of Public Policy

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

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