The Public Health Costs of Job Loss

Institute for Empirical Research in Economics, University of Zurich, and IZA, Switzerland.
Journal of Health Economics (Impact Factor: 2.58). 09/2009; 28(6):1099-115. DOI: 10.1016/j.jhealeco.2009.09.004
Source: PubMed


We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis is based on a rich data set from Austria providing comprehensive information on various types of health care costs and day-by-day work history at the individual level. Our central findings are (i) overall expenditures on medical treatments are not strongly affected by job displacement; (ii) job loss significantly increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women) although the effects are economically rather small; and (iii) sickness benefits strongly increase due to job loss.

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    • "In our study, the available data on jobrelated injuries allows us to analyze the direct impact of displacement on injury rates, by making the reasonable assumption that workers do not voluntarily become injured. A second study (Kuhn et al., 2009) analyzes the e¤ect of plant closure on the taking-up of health provisions and on the utilization of sickness bene…ts by displaced workers comparing them to a control group of nondisplaced workers. The authors report an increase in health costs for displaced workers, which is mainly caused by an increase in the amount of sickness bene…ts paid. "
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    ABSTRACT: This paper investigates the pecuniary and non-pecuniary costs of involuntary job loss by focusing on both post-displacement earnings losses and injury rates. To this end we employ a unique dataset. Administrative data from Italy describing individual work histories have been merged with individual data on workplace injuries. Propensity score matching techniques are employed to measure the causal effect of displacement on workplace injury rates. We find that in a period marked by tight labour market, re-employed displaced workers experience only moderate and short-lived earnings losses but are about 70 percent more likely to be injured at their subsequent jobs compared to the control group of non-displaced workers. These results suggest that re-employed displaced workers may trade pecuniary job attributes for non-pecuniary ones.
    European Economic Review 07/2013; 61. DOI:10.1016/j.euroecorev.2013.04.005 · 1.53 Impact Factor
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    • "Not considering the potential negative externalities on spouses might result in underestimating the public health costs of job loss (e.g. Kuhn et al. 2009). This study contributes to our understanding of spillover effects of unemployment on other household members by estimating the effect of unemployment on the spouse's mental health. "
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    ABSTRACT: Studies on health effects of unemployment usually neglect spillover effects on spouses. This study specifically investigates the effect of an individual's unemployment on the mental health of their spouse. In order to allow for causal interpretation of the estimates, it focuses on plant closure as entry into unemployment, and combines difference-in-difference and matching based on entropy balancing to provide robustness against observable and time-invariant unobservable heterogeneity. Using German Socio-Economic Panel Study data the paper reveals that unemployment decreases the mental health of spouses almost as much as for the directly affected individuals. The findings highlight that previous studies underestimate the public health costs of unemployment as they do not account for the potential consequences for spouses.
    Journal of Health Economics 03/2013; 32(3):546-558. DOI:10.1016/j.jhealeco.2013.02.004 · 2.58 Impact Factor
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    • "Even though the direction of causation is still debated (see, e.g. Böckermann and Ilmakunnas, 2009, Classen and Dunn, 2012, Eliason and Storrie, 2009, Kuhn et al., 2009, Schmitz, 2011) we drop the unemployed since they are already in a worse health status. Our final sample includes only working individuals, either full-or part-time, some of which also provide informal care. "
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    ABSTRACT: We analyze the relationship between health and the double burden of both informal care provision and full-time work using administrative data from the second biggest German sickness fund. We have information on more than 7000 caregivers over a period of three years and apply linear panel data and two-part models. As outcome measures we use detailed information on the prescription of five types of drugs. We find that individuals who provide care and also work full-time have a significantly higher consumption of antidepressant drugs and tranquilizers than those who work only. This is mostly driven by an increase in the extensive margin of drug intake.
    Labour Economics 10/2012; 24:305-322. DOI:10.1016/j.labeco.2013.09.006 · 0.92 Impact Factor
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