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Effects of Health on Wages of Australian Men

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  • LIXIN CAI

Abstract

This study uses the Household, Income and Labour Dynamics in Australia (HILDA) survey to investigate the effect of health on wages of working‐age Australian men. A simultaneous equation model of health and wages is estimated to account for the endogeneity of health. The results confirm the findings in the literature that health has a significant and positive effect on wages; it is also found that treating health as exogenous underestimates the effect substantially. Although the reverse effect of wages on health is found to be insignificant, there is evidence on the endogeneity of health arising from unobserved factors.

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  • Lixin Cai, 2009. "Effects of Health on Wages of Australian Men," The Economic Record, The Economic Society of Australia, vol. 85(270), pages 290-306, September.
    • Handle: RePEc:bla:ecorec:v:85:y:2009:i:270:p:290-306
    DOI: 10.1111/j.1475-4932.2009.00552.x
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    3. Fernández-Val, Iván & Savchenko, Yevgeniya & Vella, Francis, 2017. "Evaluating the role of income, state dependence and individual specific heterogeneity in the determination of subjective health assessments," Economics & Human Biology, Elsevier, vol. 25(C), pages 85-98.
    4. Jenny Lye & Joe Hirschberg, 2010. "Alcohol Consumption And Human Capital: A Retrospective Study Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 24(2), pages 309-338, April.
    5. Théophile Azomahou & Bity Diene & Mbaye Diene & Luc Soete, 2015. "Optimal health investment and preference structure," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 60(3), pages 521-565, November.
    6. Manuel Flores & Melchor Fernández & Yolanda Pena-Boquete, 2020. "The impact of health on wages: evidence from Europe before and during the Great Recession," Oxford Economic Papers, Oxford University Press, vol. 72(2), pages 319-346.
    7. Lixin Cai, 2008. "Be Wealthy to Stay Healthy: An Analysis of Older Australians Using the HILDA Survey," Melbourne Institute Working Paper Series wp2008n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    8. Yolanda Pena-Boquete & Manuel Flores, 2013. "Earnings returns to education, experience and health: Evidence from EU-SILC," ERSA conference papers ersa13p1169, European Regional Science Association.
    9. Preety Srivastava & Gang Chen & Anthony Harris, 2017. "Oral Health, Dental Insurance and Dental Service use in Australia," Health Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 35-53, January.
    10. Manuel Flores & Adriaan Kalwij, 2019. "What Do Wages Add to the Health‐Employment Nexus? Evidence from Older European Workers," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(1), pages 123-145, February.
    11. Ann Evans, 2021. "Reflecting on 21 Years of the HILDA Survey," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 462-468, December.
    12. Emily J. Callander & Deborah J. Schofield, 2015. "Multidimensional Poverty and Health Status as a Predictor of Chronic Income Poverty," Health Economics, John Wiley & Sons, Ltd., vol. 24(12), pages 1638-1643, December.
    13. Otsu, Yuki & Yuen, C.Y. Kelvin, 2022. "Health, crime, and the labor market: Theory and policy analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    14. Sung-Joo Yoon, 2019. "What Can We Obtain from Mental Health Care? The Dynamics of Physical and Mental Health," IJERPH, MDPI, vol. 16(17), pages 1-18, August.
    15. Gail Pacheco & Don J. Webber, 2011. "Employment propensity: The roles of mental and physical health," Working Papers 2011-01, Auckland University of Technology, Department of Economics.
    16. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports 2011-04, Centre for the Study of Living Standards.
    17. Nerina Vecchio & Paul Scuffham, 2009. "Mental Health and Hours Worked Among Nurses," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 12(3), pages 299-320.

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