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The public health costs of job loss

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  • Kuhn, Andreas
  • Lalive, Rafael
  • Zweimüller, Josef

Abstract

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.

Suggested Citation

  • Kuhn, Andreas & Lalive, Rafael & Zweimüller, Josef, 2009. "The public health costs of job loss," Journal of Health Economics, Elsevier, vol. 28(6), pages 1099-1115, December.
    • Handle: RePEc:eee:jhecon:v:28:y:2009:i:6:p:1099-1115
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    More about this item

    Keywords

    Social cost of unemployment Health Job loss Plant closure;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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