Unequal effects of disruptive events

Disruptive events have significant consequences for the individuals and families who experience them, but these effects do not occur equally across the population. While some groups are strongly affected, others experience few consequences. We review recent findings on inequality in the effects of disruptive events. We consider heterogeneity based on socioeconomic resources, race/ethnicity, the likelihood of experiencing disruption, and contextual factors such as the normativity of the event in particular social settings. We focus on micro-level events affecting specific individuals and families, including divorce, job loss, home loss and eviction, health shocks and deaths, and violence and incarceration, but also refer to macro-level events such as recession and natural disasters. We describe patterns of variation that suggest a process of resource disparities and cumulative disadvantage versus those that reflect the impact of non-normative and unexpected shocks. Finally, we review methodological considerations when examining variation in the effect of disruptive events.

Who is resilient in a time of crisis? The importance of financial and non-financial resources

Enhancing population resilience to adverse events is now a policy priority. Accordingly, there have been calls for more evidence on the determinants of resilience. We answer this call by identifying financial and non-financial resources associated with psychological resilience during the COVID-19 pandemic. Using longitudinal survey data, psychological resilience is measured by comparing distress reported pre-COVID-19 with distress reported during the outbreak and initial lockdown in April 2020. Methodologically, we compare differences in resilience and resources between people with identical gender, ethnicity, health, parenthood status, education, employment status, and region of residence (all measured pre-2020). We also provide estimates from within-household comparisons. Surprisingly, income, savings, and debt levels did not affect the likelihood of psychologically resilient outcomes. Cognitive ability, religiosity, and neighborhood social capital also had no protective effect. In contrast, we find robust evidence that non-cognitive skills, measured by self-efficacy, strongly protected against psychological distress. Self-efficacy also dampened the increase in distress caused by large earnings shocks. These findings support investments in non-cognitive skills that modify the damage-function from adverse events.

The effect of accidents on labor market outcomes: Evidence from Chile

We estimate the causal effect of accidents on employment and earnings among Chilean men using event study methods and monthly administrative data. An accident of any type reduces the probability of being employed by 8.4 percentage points in the first year, by 11.2 percentage points in the second year, and by 14.8 percentage points in the third year after the accident. On average, over the three years after the accident, employment declines by 14%, relative to the pre-accident mean. In addition, accidents reduce monthly earnings by around 11% in the first year, 17% in the second year, and 22% in the third year after the accident. On average, monthly earnings fall by 16%, relative to the pre-accident average. Thus, we estimate persistent and increasing labor market effects of accidents over time. These effects vary by individuals' age, education, and industry and by severity of the accident. Our findings imply that the economic consequences of health shocks go beyond direct medical expenses.

Health shocks and couples' labor market participation: A turning point or stuck in the trajectory?

A health shock can have lasting consequences for the employment of not only the individuals experiencing it, but also their spouses. In this article, we complement the individual approach to the impact of health shocks with a dyadic perspective and show how employment opportunities and restrictions within couples are interdependent in the face of severe illness. We investigate whether the association between male spouses' health shocks and couples' employment trajectories depends on household specialization and both spouses' education. Multichannel sequence analysis is applied to retrospective life-course data from the Survey for Health, Ageing and Retirement in Europe for couples with health shocks and their matched controls (N = 1022). By identifying typical employment trajectories, we find that health shocks are negatively associated with trajectories where both spouses continue in full-time employment and positively with trajectories where the man retires while the woman continues working and where both spouses retire simultaneously. Couples' trajectories differ according to the spouses' combined education levels. Findings suggest that health shocks may exacerbate economic inequalities within and between couples.

Are the Sick Left Behind at the Peripheries? Health Selection in Migration to Growing Urban Centres in Finland

We study health selection in rural–urban migration in Finland using register data. Specifically, we ask whether ‘movers’ differ from ‘stayers’ in their use of special health care services prior to moving. We focus on migration to twelve growing urban centres in different sub-groups of the population as well as in different regions, using multinomial logistic regression and multilevel modelling and by distinguishing between short- and long-distance moves. The results show that urban centres attract healthier individuals, while people with health problems are also prone to move, but not to urban centres. The results were similar when looking only at psychiatric diagnoses. The findings suggest that it is important to distinguish between different types of moves when studying health-selective migration. Studying the patterns of migration according to health enables us to understand drivers of regional health differences. Moreover, such evidence will help in projecting future demand for healthcare across the country.

Acute health shocks and labour market outcomes: Evidence from the post crash era

We investigate the labour supply response to an acute health shock for individuals of all working ages, in the post crash era, combining coarsened exact matching and entropy balancing to preprocess data prior to undertaking parametric regression. Identification exploits uncertainty in the timing of an acute health shock, defined by the incidence of cancer, stroke, or heart attack, based on data from Understanding Society. The main finding implies a substantial increase in the baseline probability of labour market exit along with reduced hours and earnings. Younger workers display a stronger labour market attachment than older counterparts, conditional on a health shock. Impacts are stronger for women, older workers, and those who experience more severe limitations and impairments. This is shown to be robust to a broad range of approaches to estimation. Sensitivity tests based on pre-treatment outcomes and using future health shocks as a placebo treatment support our identification strategy.

Medical innovation, education, and labor market outcomes of cancer patients

Innovations in cancer treatment have lowered mortality, but little is known about their economic benefits. We assess the effect of two decades of improvement in cancer treatment options on the labor market outcomes of breast and prostate cancer patients. In addition, we compare this effect across cancer patients with different levels of educational attainment. We estimate the effect of medical innovation on cancer patients' labor market outcomes employing tax return and cancer registry data from Canada and measuring medical innovation by using the number of approved drugs and a quality-adjusted patent index. We find that innovations in cancer treatment during the 1990s and 2000s reduced the negative employment effects of cancer by 63% to 70%, corresponding to a reduction in the economic costs of prostate and breast cancer diagnoses by 13,500 and 5800 dollars per year, respectively. The benefits of medical innovation are limited to cancer patients with postsecondary education.

How does retirement affect healthcare expenditures? Evidence from a change in the retirement age

Using individual-level administrative panel data from Hungary, we estimate causal effects of retirement on outpatient and inpatient care expenditures and pharmaceutical expenditures. Our identification strategy is based on an increase in the official early retirement age of women, using that the majority of women retire upon reaching that age. According to our descriptive results, people who are working before the early retirement age have substantially lower healthcare expenditures than nonworkers, but the expenditure gap declines after retirement. Our causal estimates from a two-part (hurdle) model show that the shares of women with positive outpatient care, inpatient care, and pharmaceutical expenditures, respectively, decrease by 3.0, 1.4, and 1.3 percentage points in the short run due to retirement. These results are driven by the relatively healthy, by those who spent some time on sick leave and by the less educated. The effect of retirement on the size of positive healthcare expenditures is generally not significant.

Employment, job skills and occupational mobility of cancer survivors

Previous studies find significant negative effects of cancer on employment, with stronger effects for less-educated workers. We investigate whether the effect of cancer varies by skill requirement in the pre-cancer occupation, whether such heterogeneity can explain educational gradients, and whether cancer is associated with changes in job characteristics for cancer survivors who remain employed four years after the diagnosis. We combine Danish administrative registers with detailed skill requirement data and use individuals without cancer as a control group. Our main findings are the following: the negative effect of cancer on employment is stronger if the pre-cancer occupation requires high levels of manual skills or low levels of cognitive skills; the educational gradient diminishes substantially if we allow the effects of cancer to also depend on pre-cancer skill requirements; and cancer is not associated with occupational mobility, indicating potential for policies that reduce labour market frictions for cancer survivors.

Gender career divide and women's disadvantage in depressive symptoms and physical limitations in France

This study investigated the relationship between women's disadvantage in mental health and physical functioning and gender differences in career backgrounds. Sexual division of labor persists and key career characteristics are overrepresented in women: low-skilled first job, downward occupational trajectory, interruptions. These interrelated characteristics are usually linked to poor health. Their overrepresentation in women may be related to the female-male health gap; however, it may not if overrepresentation transposed into substantially weaker associations with poor health outcomes. To address this question, we used the French population survey "Health and Occupational Trajectories" (2006) and focused on 45-74 year-old individuals who ever worked (n=7537). Past career characteristics were qualified by retrospective information. Logistic regressions identified past characteristics related to current depressive symptoms and physical limitations. Non-linear decomposition showed whether these characteristics contributed to the gender health gap, through their different distribution and/or association with health. The overrepresentation of unskilled first jobs, current and past inactivity and unemployment in women contributed to their excess depressive symptoms. These contributions were only slightly reduced by the weaker mental health-relatedness of current inactivity in women and increased by the stronger relatedness of low-skilled and self-employed first jobs. Overrepresentation of current inactivity, past interruptions and downward trajectories also contributed positively to women's excess physical limitations. Gender-specific career backgrounds were significantly linked to women's disadvantage in mental health and physical functioning. We need to further explore whether equalization of opportunities, especially at the early stages and in terms of career continuity, could help to reduce women's mental and physical health disadvantage.

Labor market consequences of growing up with a sibling with type 1-diabetes

Economic research on child health and future labor market outcomes has mainly focused on children with impaired health themselves, and only recently begun to assess spillover effects for siblings. Yet, the challenge to accommodate a family's routines within the requirements of a complex and time-consuming disease is most likely to spillover on siblings. While the burden of ill health and managing a disease may have adverse effects, living with a disease may still give families useful experiences and skills that favor future labor market outcomes. Therefore, the potential labor market impacts of growing up with a sick sibling could be both positive and negative. This study investigates differences in the progression of annual labor earnings between siblings of children with type 1-diabetes and population controls. The data is based on detailed Swedish longitudinal registers, covering annual labor earnings in the years 1990-2010 for 764 siblings of 764 children with diabetes and 5506 population controls born in 1962-1971, and follow individuals between ages 19-48. The results indicate that brothers of children with type 1-diabetes have lower earnings growth than controls, while sisters' earnings growth appears unaffected. Consequently, spillovers from one family member to another might differ within a family.

Labour market participation after breast cancer for employees from the private and public sectors: Educational and sector gradients in the effect of cancer

For employees who get cancer and survive, the probability of returning to work may depend on their ability to work, potential earnings losses if they do not return to work, qualifications and job type, but also on characteristics of the pre-cancer workplace. This paper focuses on differences between public and private sector employees in the effect of breast cancer on the probability of being out of the labour force three years after the diagnosis. We use propensity score weighting methods and a large longitudinal Danish administrative dataset which allows us to control for a wide range of important baseline characteristics such as education, sector of employment, labour market status, income, health, and demographics. We find that the educational gradient in the effect of cancer is significant in the public sector, where the estimated effects are 11.5 and 3.8 percentage points, respectively, for the low- and high-educated. The corresponding estimates for the private sector are 6.2 and 3.2 percentage points and here the educational gradient is only marginally significant. We discuss possible mechanisms behind the large sector gradient for the low-educated.