Working Paper: CEPR ID: DP7420
Authors: Andreas Kuhn; Rafael Lalive; Josef Zweimüller
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 of deteriorating health leading to job loss 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 (hospitalizations, drug prescriptions, doctor visits) are not strongly affected by job displacement; (ii) job loss increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women); and (iii) sickness benefits strongly increase due to job loss.
Keywords: health; job loss; plant closure; social cost of unemployment
JEL Codes: I12; I19; J28; J65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| job loss due to plant closure (J65) | public health costs associated with health provisions (H51) |
| job loss due to plant closure (J65) | public health costs due to mental health problems (I12) |
| job loss due to plant closure (J65) | public health costs associated with sickness benefit payments (H51) |
| job loss due to plant closure (J65) | sick leave days for women (J22) |