Health Events, Health Insurance and Labor Supply: Evidence from the Health and Retirement Survey

The economic consequences of health problems are reported to be enormous. For example, many investigators have concluded that the cost to society
of common health problems such as heart disease, diabetes, and cancer is many
billions of dollars per year in terms of lost work productivity, intensive medical
treatments, and additional supportive care. However, these estimates have several important limitations. Few data sets have incorporated detailed information on health problems and economic circumstances such as retirement, medical and personal care expenditures, income, and wealth. Consequently, most
existing studies have had to combine data from different sources, possibly
missing important correlations between variables such as insurance availability
and the occurrence of health problems. Many of these studies have been based
on cross-sectional, descriptive comparisons of individuals with and without
health problems. As a result, it is difficult to account for other differences besides health problems that might also have affected these outcomes. For
example, individuals with health problems may have had chronically worse
health status, or have lower-income backgrounds, or have other differences in
preferences that might have led to differences in economic outcomes anyway.