Long-Run Effects of Health Shocks in a Highly Regulated Labour Market

53 Pages Posted: 8 Nov 2019 Last revised: 21 Jan 2020

See all articles by Michele Belloni

Michele Belloni

University of Turin; Center for Research on Pensions and Welfare Policies (CeRP); Netspar

Antonella Bena

Department of Epidemiology - ASL TO3, Grugliasco, Torino, Italy

Elena Farina

Department of Epidemiology - ASL TO3, Grugliasco, Torino, Italy

Irene Simonetti

Ca Foscari University of Venice

Francesca Zantomio

Ca Foscari University of Venice

Date Written: November 7, 2019

Abstract

Based on administrative data covering employment, social security and hospital record histories, we investigate the effect of acute cardiovascular health shocks resulting in unplanned hospitalisation, on blue collars’ long-term labour outcomes in Italy. The Italian institutional setting, characterised by a highly regulated labour market and high job protection, is different from that of countries – mainly Nordic and Anglo-Saxon – covered in previous studies. We apply matching and parametric regression techniques to remove possible bias arising from observable and time-invariant unobservable confounders. Results point at sizeable and persistent reductions in employment and labour income, while hours and wage adjustments appear limited. Whereas a relatively generous social insurance system might compensate the earnings loss, our findings question the appropriateness of existing labour inclusion policies.

Keywords: health shocks, employment, labour market institutions, administrative data

JEL Classification: I10, J22, J24, J31, C14

Suggested Citation

Belloni, Michele and Bena, Antonella and Farina, Elena and Simonetti, Irene and Zantomio, Francesca, Long-Run Effects of Health Shocks in a Highly Regulated Labour Market (November 7, 2019). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 32/WP/2019 , Available at SSRN: https://ssrn.com/abstract=3482466 or http://dx.doi.org/10.2139/ssrn.3482466

Michele Belloni

University of Turin ( email )

Lungo Dora Siena 100
Torino, 10153
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Antonella Bena

Department of Epidemiology - ASL TO3, Grugliasco, Torino, Italy ( email )

Via Sabaudia 164
Grugliasco, 10095

Elena Farina

Department of Epidemiology - ASL TO3, Grugliasco, Torino, Italy ( email )

Via Sabaudia 164
Grugliasco, 10095

Irene Simonetti (Contact Author)

Ca Foscari University of Venice ( email )

Sestiere Cannaregio, 873
Fondamenta San Giobbe
Venice, Veneto 30123
Italy

Francesca Zantomio

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

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