Life­-Cycle Wage Dynamics and Self­-Perceived Health Status
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Publication date: 2014-08-31
GNPJE 2014;272(4):121-142
The article examines the relationship between health, employment and productivity growth within a person’s life cycle, as measured with the level of individual wages in line with the neoclassical theory. The authors proxy productivity with wages and analyze employment rates, wages and their dynamics by age for people with different health status in Poland. Using nonparametric methods and data from the European Survey on Income and Living Conditions (EU‑SILC) in 2005–2009, the authors show that poorer health is associated with lower earnings and lower employment rates. Poorer health diminishes the probability of employment, the authors say, but the declining employment rate at an older age is more closely connected with falling employment within a health group than with a rising percentage of people in poor health. Lower wages for persons with poorer health are mainly due to their lower education and shorter work experience as well as their concentration in low‑paid sectors and occupations, Lis and Magda note. The isolated impact of health on wage dynamics within a person’s life cycle is very small, according to the authors. Moreover, the results of the study suggest that the decline in health is not the main driver of the observed slump in employment rates at older ages in Poland. The very low employment rates for younger people and those in poor health remain a major challenge for labor market and social policy makers, the authors conclude.
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