IDEAS home Printed from https://ideas.repec.org/p/ven/wpaper/201932.html
   My bibliography  Save this paper

Long-run effects of health shocks in a highly regulated labour market

Author

Listed:
  • Michele Belloni

    (University of Turin; NETSPAR; CeRP-Collegio Carlo Alberto)

  • Antonella Bena

    (Department of Epidemiology, ASL TO3 Grugliasco, Turin)

  • Elena Farina

    (Department of Epidemiology, ASL TO3 Grugliasco, Turin)

  • Irene Simonetti

    (Department of Economics, Ca' Foscari University of Venice)

  • Francesca Zantomio

    (Department of Economics, Ca' Foscari University of Venice; CRIEP; Health Econometrics and Data Group (York))

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.

Suggested Citation

  • Michele Belloni & Antonella Bena & Elena Farina & Irene Simonetti & Francesca Zantomio, 2019. "Long-run effects of health shocks in a highly regulated labour market," Working Papers 2019: 32, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2019:32
    as

    Download full text from publisher

    File URL: https://www.unive.it/web/fileadmin/user_upload/dipartimenti/DEC/doc/Pubblicazioni_scientifiche/working_papers/2019/WP_DSE_belloni_bena_farina_simonetti_zantomio_32_19.pdf
    File Function: First version, anno
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Devicienti, Francesco & Grinza, Elena & Vannoni, Davide, 2015. "The Impact of Part-Time Work on Firm Total Factor Productivity: Evidence from Italy," IZA Discussion Papers 9463, Institute of Labor Economics (IZA).
    2. James Smith, 2005. "Consequences and Predictors of New Health Events," NBER Chapters, in: Analyses in the Economics of Aging, pages 213-240, National Bureau of Economic Research, Inc.
    3. García-Gómez, Pilar & Jones, Andrew M. & Rice, Nigel, 2010. "Health effects on labour market exits and entries," Labour Economics, Elsevier, vol. 17(1), pages 62-76, January.
    4. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    5. Terhi Maczulskij & Petri Böckerman, 2019. "Harsh times: do stressors lead to labor market losses?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(3), pages 357-373, April.
    6. Bradley, Cathy J. & Neumark, David & Barkowski, Scott, 2013. "Does employer-provided health insurance constrain labor supply adjustments to health shocks? New evidence on women diagnosed with breast cancer," Journal of Health Economics, Elsevier, vol. 32(5), pages 833-849.
    7. Cai, Lixin, 2010. "The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model," Labour Economics, Elsevier, vol. 17(1), pages 77-90, January.
    8. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    9. Robert Jäckle & Oliver Himmler, 2010. "Health and Wages: Panel Data Estimates Considering Selection and Endogeneity," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
    10. Stephen Wu, 2003. "The Effects of Health Events on the Economic Status of Married Couples," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
    11. Lindeboom, Maarten & Llena-Nozal, Ana & van der Klaauw, Bas, 2016. "Health shocks, disability and work," Labour Economics, Elsevier, vol. 43(C), pages 186-200.
    12. Maree L Hackett & Nick Glozier & Stephen Jan & Richard Lindley, 2012. "Returning to Paid Employment after Stroke: The Psychosocial Outcomes In StrokE (POISE) Cohort Study," PLOS ONE, Public Library of Science, vol. 7(7), pages 1-8, July.
    13. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    14. Petter Lundborg & Martin Nilsson & Johan Vikström, 2015. "Heterogeneity in the impact of health shocks on labour outcomes: evidence from Swedish workers," Oxford Economic Papers, Oxford University Press, vol. 67(3), pages 715-739.
    15. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2011. "Multivariate Matching Methods That Are Monotonic Imbalance Bounding," Journal of the American Statistical Association, American Statistical Association, vol. 106(493), pages 345-361.
    16. 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.
    17. Jones, M.A. & Rice, N. & Zantomio, F., 2016. "Acute health shocks and labour market outcomes," Health, Econometrics and Data Group (HEDG) Working Papers 16/04, HEDG, c/o Department of Economics, University of York.
    18. Halla, Martin & Zweimüller, Martina, 2013. "The effect of health on earnings: Quasi-experimental evidence from commuting accidents," Labour Economics, Elsevier, vol. 24(C), pages 23-38.
    19. Carlos Dobkin & Amy Finkelstein & Raymond Kluender & Matthew J. Notowidigdo, 2018. "The Economic Consequences of Hospital Admissions," American Economic Review, American Economic Association, vol. 108(2), pages 308-352, February.
    20. Holmlund, Bertil, 2014. "What do labor market institutions do?," Labour Economics, Elsevier, vol. 30(C), pages 62-69.
    21. Zissimopoulos, Julie M. & Karoly, Lynn A., 2007. "Transitions to self-employment at older ages: The role of wealth, health, health insurance and other factors," Labour Economics, Elsevier, vol. 14(2), pages 269-295, April.
    22. Trevisan, Elisabetta & Zantomio, Francesca, 2016. "The impact of acute health shocks on the labour supply of older workers: Evidence from sixteen European countries," Labour Economics, Elsevier, vol. 43(C), pages 171-185.
    23. Heinesen, Eskil & Kolodziejczyk, Christophe, 2013. "Effects of breast and colorectal cancer on labour market outcomes—Average effects and educational gradients," Journal of Health Economics, Elsevier, vol. 32(6), pages 1028-1042.
    24. Ho, Daniel E. & Imai, Kosuke & King, Gary & Stuart, Elizabeth A., 2007. "Matching as Nonparametric Preprocessing for Reducing Model Dependence in Parametric Causal Inference," Political Analysis, Cambridge University Press, vol. 15(3), pages 199-236, July.
    25. Pilar García-Gómez & Hans van Kippersluis & Owen O’Donnell & Eddy van Doorslaer, 2013. "Long-Term and Spillover Effects of Health Shocks on Employment and Income," Journal of Human Resources, University of Wisconsin Press, vol. 48(4), pages 873-909.
    26. Hugo Benítez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2004. "How large is the bias in self-reported disability?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 649-670.
    27. Francesco Devicienti & Agata Maida & Paolo Sestito, 2007. "Downward Wage Rigidity in Italy: Micro-Based Measures and Implications," Economic Journal, Royal Economic Society, vol. 117(524), pages 530-552, November.
    28. Moran, John R. & Short, Pamela Farley & Hollenbeak, Christopher S., 2011. "Long-term employment effects of surviving cancer," Journal of Health Economics, Elsevier, vol. 30(3), pages 505-514, May.
    29. Courtney C. Coile, 2004. "Health Shocks and Couples' Labor Supply Decisions," NBER Working Papers 10810, National Bureau of Economic Research, Inc.
    30. Eugenio Zucchelli & Andrew M. Jones & Nigel Rice & Anthony Harris, 2010. "The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(2), pages 191-218.
    31. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416, Elsevier.
    32. Datta Gupta, Nabanita & Kleinjans, Kristin J. & Larsen, Mona, 2015. "The effect of a severe health shock on work behavior: Evidence from different health care regimes," Social Science & Medicine, Elsevier, vol. 136, pages 44-51.
    33. Haan, Peter & Myck, Michal, 2009. "Dynamics of health and labor market risks," Journal of Health Economics, Elsevier, vol. 28(6), pages 1116-1125, December.
    34. Hainmueller, Jens & Xu, Yiqing, 2013. "ebalance: A Stata Package for Entropy Balancing," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 54(i07).
    35. Lixin Cai & Kostas Mavromaras & Umut Oguzoglu, 2014. "The Effects Of Health Status And Health Shocks On Hours Worked," Health Economics, John Wiley & Sons, Ltd., vol. 23(5), pages 516-528, May.
    36. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    37. Anne Moller Dano, 2005. "Road injuries and long‐run effects on income and employment," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 955-970, September.
    38. Kerwin Kofi Charles, 2003. "The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Annarita Macchioni Giaquinto & Andrew M. Jones & Nigel Rice & Francesca Zantomio, 2021. "Labour supply and informal care responses to health shocks within couples: evidence from the UKHL," Working Papers 2021:11, Department of Economics, University of Venice "Ca' Foscari".
    2. Annarita Macchioni Giaquinto & Andrew M. Jones & Nigel Rice & Francesca Zantomio, 2022. "Labor supply and informal care responses to health shocks within couples: Evidence from the UK," Health Economics, John Wiley & Sons, Ltd., vol. 31(12), pages 2700-2720, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simonetti, Irene & Belloni, Michele & Farina, Elena & Zantomio, Francesca, 2022. "Labour market institutions and long term adjustments to health shocks: Evidence from Italian administrative records," Labour Economics, Elsevier, vol. 79(C).
    2. Jones, Andrew M. & Rice, Nigel & Zantomio, Francesca, 2020. "Acute health shocks and labour market outcomes: Evidence from the post crash era," Economics & Human Biology, Elsevier, vol. 36(C).
    3. Andrew M. Jones & Nigel Rice & Francesca Zantomio, 2016. "Acute health shocks and labour market outcomes," Working Papers 2016:09, Department of Economics, University of Venice "Ca' Foscari".
    4. Macchioni Giaquinto, Annarita & Jones, Andrew M. & Rice, Nigel & Zantomio, Francesca, 2021. "Labour supply and informal care responses to health shocks within couples: evidence from the UKHLS," GLO Discussion Paper Series 806, Global Labor Organization (GLO).
    5. Trevisan, Elisabetta & Zantomio, Francesca, 2016. "The impact of acute health shocks on the labour supply of older workers: Evidence from sixteen European countries," Labour Economics, Elsevier, vol. 43(C), pages 171-185.
    6. Emmanuel Duguet & Christine Le Clainche, 2020. "The Socioeconomic and Gender Impacts of Health Events on Employment Transitions in France: A Panel Data Study," Journal of Human Capital, University of Chicago Press, vol. 14(3), pages 449-483.
    7. David Candon, 2019. "The joint effect of health shocks and eligibility for social security on labor supply," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 969-988, September.
    8. Annarita Macchioni Giaquinto & Andrew M. Jones & Nigel Rice & Francesca Zantomio, 2022. "Labor supply and informal care responses to health shocks within couples: Evidence from the UK," Health Economics, John Wiley & Sons, Ltd., vol. 31(12), pages 2700-2720, December.
    9. Ekaterina Aleksandrova & Venera Bagranova & Christopher J Gerry, 2021. "The effect of health shocks on labour market outcomes in Russia [Ageing and unused capacity in Europe: is there an early retirement trap?]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 45(6), pages 1319-1336.
    10. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    11. 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).
    12. Candon, David, 2018. "The effect of cancer on the labor supply of employed men over the age of 65," Economics & Human Biology, Elsevier, vol. 31(C), pages 184-199.
    13. Jeon, Sung-Hee & Pohl, R. Vincent, 2019. "Medical innovation, education, and labor market outcomes of cancer patients," Journal of Health Economics, Elsevier, vol. 68(C).
    14. Pilar García-Gómez & Hans van Kippersluis & Owen O’Donnell & Eddy van Doorslaer, 2013. "Long-Term and Spillover Effects of Health Shocks on Employment and Income," Journal of Human Resources, University of Wisconsin Press, vol. 48(4), pages 873-909.
    15. Vincenzo Carrieri & Andrew M. Jones & Francesco Principe, 2020. "Productivity Shocks and Labour Market Outcomes for Top Earners: Evidence from Italian Serie A," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(3), pages 549-576, June.
    16. Eric Delattre & Richard K. Moussa & Mareva Sabatier, 2019. "Health condition and job status interactions: econometric evidence of causality from a French longitudinal survey," Health Economics Review, Springer, vol. 9(1), pages 1-18, December.
    17. Lixin Cai, 2021. "The effects of health on the extensive and intensive margins of labour supply," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(1), pages 87-117, January.
    18. Riekhoff, Aart-Jan & Vaalavuo, Maria, 2021. "Health shocks and couples’ labor market participation: A turning point or stuck in the trajectory?," Social Science & Medicine, Elsevier, vol. 276(C).
    19. Harris, M.N. & Zhao, X. & Zucchelli, E., 2016. "The dynamics of health and labour market transitions at older ages: evidence from a multi-state model," Health, Econometrics and Data Group (HEDG) Working Papers 16/30, HEDG, c/o Department of Economics, University of York.
    20. Schurer, Stefanie, 2017. "Bouncing back from health shocks: Locus of control and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 1-20.

    More about this item

    Keywords

    Health shocks; employment; labour market institutions; administrative data;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ven:wpaper:2019:32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sassano Sonia (email available below). General contact details of provider: https://edirc.repec.org/data/dsvenit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.