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This paper brings a European perspective to the mainly U.S.-based literature on the relationship between obesity and labour-market outcomes. Using micro-data on workers aged 50 and over from the newly developed SHARE database, the effects of obesity on employment, hours worked, and wages across 10 European countries were analysed. Pooling all countries, the results showed that being obese was associated with a significantly lower probability of being employed for both women and men. Moreover, the results showed that obese European women earned 10% less than their non-obese counterparts. For men, however, the effect was smaller in size and insignificant. Taking health status into account, obese women still earned 9% less. No significant effect of obesity on hours worked was obtained, however. Regressions by country-group revealed that the effects of obesity differed across Europe. For instance, the effect of obesity on employment was greatest for men in southern and central Europe, while women in central Europe faced the greatest wage penalty. The results in this study suggest that the ongoing rise in the prevalence of obesity in Europe may have a non-negligible effect on the European labour market.

An adverse health event can affect women’s work capacity as they need time to recover. The institutional framework in the Netherlands provides employment protection during the first two years after the diagnosis. In this study, we have assessed the extent to which women’s employment is affected in the short- and long term by an adverse health event. We have used administrative Dutch data which follow women aged 25 to 55 years for four years after a medical diagnosis. We found that diagnosed women start leaving employment during the protection period and four years later they were about one percentage point less likely to be employed. Women in permanent employment did not reduce their employment during the protection period and reduced their employment with less than 0.5 percentage points thereafter. Furthermore, we found minor adjustments in the working hours in the short term and no adjustments in the long term. Lastly, we found that for wages, and not for employment and hours, adjustments could be related to the severity of the health condition: women diagnosed with temporary health conditions experienced a short-term wage penalty of about 0.5–1.7 percent and those diagnosed with chronic and incapacitating conditions experienced a long-term wage penalty of about 0.5 percent, while women diagnosed with some chronic and nonincapacitating conditions, such as respiratory conditions, experienced no wage changes in the short or long term.

In the spirit of Polachek (1975) and the later work of Becker (1985) on the role of specialization within the family, we examine the relationship between fringe benefits and the division of labor within a married household. The provision of fringe benefits is complicated by their non-additive nature within the household, as well as IRS regulations that stipulate that they be offered in a non-discriminatory manner in order to maintain their tax-exempt status. We model family decisions within a framework in which one spouse specializes in childcare and as a result experiences a reduction in market productive capacity. Our model predicts that the forces toward specialization become stronger as the number of children increase, so that the spouse specializing in childcare will have some combination of lower wages, hours worked, and fringe benefits. We demonstrate that to the extent that labor markets are incomplete, the family is less likely to obtain health insurance from the employer of the spouse that specializes in childcare. Using data from the April 1993 CPS we find evidence consistent with our model.

This study analyses the effects of alcohol consumption on the labour market outcomes of older individuals. The data set used consists of five waves of the Health and Retirement Study. The results from models with a limited number of covariates indicate that there is a wage and earnings premium associated with alcohol use. This premium progressively diminishes as more individual-level controls are added to the standard earnings function. The data set is longitudinal which allows for estimation of individual-fixed-effects specifications. These results indicate that alcohol use does not have a positive effect on earnings and wages.

In this chapter, we investigate two-way causality between health and the hourly wage. We employ insights from the human capital and compensating wage differential models, a panel formed from the National Longitudinal Survey of Youth 1997, and dynamic panel estimation methods in this investigation. We adopt plausible specifications in which a change in health induces a change in the wage with a lag and a change in the wage induces a change in health, also with a lag. We uncover a causal relationship between two of the five measures of health and the wage in which a reduction in health leads to an increase in the wage rate in a panel of US young adults who had completed their formal schooling by 2006 and were continuously employed from that year through 2011. There is no evidence of a causal relationship running from the wage rate to health in this panel. The former result highlights the multidimensional nature of health. It is consistent with an extension of the compensating wage differential model in which a large amount of effort in one period is required to obtain promotions and the wage increases that accompany them in subsequent periods. That effort may cause reductions in health and to a negative effect of health in the previous period on the current period wage. In this framework, employees have imperfect information about the effort requirements of a particular job when they are hired, and employers have imperfect information about the amount of effort new hirers are willing to exert. The result is also consistent with a model in which investments in career advancement compete with investments in health for time – the ultimate scarce resource. The lack of a causal effect of the wage on health may suggest that forces that go in opposite directions in the human capital and compensating wage differential models offset each other.

I use data from employers and longitudinal data from former/current recipients covering the period 1997 to early 2004 to analyze the relationship between job skills, job changes, and the evolution of wages. I analyze the effects of job skill requirements on starting wages, on-the-job training opportunities, wage growth prospects, and job turnover. The results show that jobs of different skill requirements differ in their prospects for earnings growth, independent of the workers who fill these jobs. Furthermore, these differences in wage growth opportunities across jobs are important determinants of workers’ quit propensities (explicitly controlling for unobserved worker heterogeneity). The determinants and consequences of job dynamics are investigated. The results using a multiplicity of methods, including the estimation of a multinomial endogenous switching model of wage growth, show that job changes, continuity of work involvement, and the use of cognitive skills are all critical components of the content of work experience that leads to upward mobility. The results underscore the sensitivity of recipients’ job transition patterns to changes in labor market demand conditions.

Empirical studies show that years of schooling are positively correlated with good health. The implication may go from education to health, from health to education, or from factors that influence both variables. We formalize a model that determines an individual’s demand for knowledge and health based on the causal effects, and study the impacts on the individual’s decisions of policy instruments such as subsidies on medical care, subsidizing schooling, income tax reduction, lump-sum transfers, and improving health at young age. Our results indicate that income redistribution policies may be the best instrument to improve welfare, while a medical care subsidy is the best instrument for longevity. Subsidies to medical care or education would require large imperfections in these markets to be more welfare improving than distributional policies.

The health consequences of child labor may take time to manifest themselves. This study examines whether children who began working at a young age experience increased incidence of illness or physical disability as adults. When child labor and schooling are treated as chosen without consideration of unobserved abilities or health endowments, child labor appears to have small adverse effects on a wide variety of health measures. Some adverse health consequences such as heart disease or hypertension seem unlikely to be caused by child labor. However, when we allow unobserved health and ability endowments to alter the age of labor market entry and years of schooling completed, the joint effects of child labor and schooling on health become larger while the less plausible health consequences lose significance. Results imply that delaying entry into child labor while increasing time in school significantly lowers the probability of early onset of physical ailments such as back problems, arthritis, or reduced strength or stamina. However, our methods are not able to distinguish between the health impacts of child labor from the impacts of reduced time in school.

This paper uses two complementary approaches to estimate the effect of right-to-work (RTW) laws on wages and unionization rates. The first approach uses an event study design to analyze the impact of the adoption of RTW laws in five US states since 2011. The second approach relies on a differential exposure design that exploits the differential impact of RTW laws on industries with high unionization rates relative to industries with low unionization rates. Both approaches indicate that RTW laws lower wages and unionization rates. Under the assumption that RTW laws only affect wages by lowering the unionization rate, RTW can be used as an instrumental variable (IV) to estimate the causal effect of unions on wages. In our preferred specification based on the differential exposure design, the IV estimate of the effect of unions on log wages is 0.35, which substantially exceeds the corresponding OLS estimate of 0.16. This large wage effect suggests that RTW may also directly affect wages due to a reduced union threat effect.