The Impact of Health on Employment, Wages and Hours Worked Over the Life Cycle

This paper examines the effect of health problems on employment, annual hours worked and hourly wages. The Health and Retirement Study data are used to compile employment and health experience profiles over the lifetimes of respondents. These profiles are used to estimate the impact of temporary and permanent illnesses. Permanent health conditions have negative effects on labor market outcomes. Females are found to have larger reductions in wages, but males have bigger decreases in hours worked. The onset of health problems in the 40s produces the largest negative consequences for males, while for females negative effects peak in the 30s. 2003 Board of Trustees of the University of Illinois. All rights reserved.