An estimate of self-employment income underreporting in Finland

This paper estimates the extent of income underreporting by the self-employed in Finland using the expenditure based approach developed by Pissarides & Weber (1989). Household spending data are for the years 1994 to 1996. Depending on how a selfemployed household is defined, the results suggest that self-employment income in Finland is underreported by some 16-40%. Since income for the self-employed is about 8 % of all incomes in Finland, the size of this part of the black economy in Finland is estimated to be about 1.3-3.2% of GDP.

Creative destruction and employee well-being

We examine the effects of establishment- and industry-level labor market turnover on employees’ job satisfaction and perceived job insecurity. Our linked employer-employee panel data contain both information on employees’ subjective well-being and register-based information on job and worker flows. The results show that job destruction and worker outflow measures reduce job satisfaction and, especially, perceived security. These effects are much weaker when the individual-specific fixed effects are taken into account. The evidence also reveals that the establishment-level job and worker flows do not translate into higher wages. These findings speak against the existence of compensating wage differentials for job uncertainty.job flows; worker flows; job satisfaction; perceived security; job instability

Alcohol Consumption and Sickness Absence: Evidence from Panel Data

This paper examines the relationship between alcohol consumption and sickness absence. We use regional panel data from Finland over the period 1993-2005. The data on individuals’ health that we are using originates from Health Behaviour and Health among the Finnish Population conducted by the National Public Health Institute. The results show that alcohol consumption is associated with sickness absence, and particularly so for men. Therefore, the earlier aggregate time-series evidence from Sweden is largely confirmed in a regional panel data setting.Alcohol consumption; sickness absence

Innovative Work Practices and Sickness Absence: What Does a Nationally Representative Employee Survey Tell?

The paper examines the effect of innovative work practices on the prevalence of sickness absence and accidents at work. We focus on several different aspects of workplace innovations (self-managed teams, information sharing, employer-provided training and incentive pay) along with the “bundles” of those practices. We use nationally representative individual-level data from the Finnish Quality of Work Life Survey from 2008. Using single equation models, we find that innovative work practices increase short-term sickness absence for blue-collar and lower white-collar employees. In two-equation models that treat innovative workplace practices as endogenous variables we do not find relationship between innovative work practices and sickness absence or accidents at work.innovative work practices; workplace innovation; sickness absence; accidents

Alcohol mortality, drinking behaviour, and business cycles: are slumps really dry seasons?

This paper explores the connection between alcohol mortality, drinking behaviour and macroeconomic fluctuations in Finland by using both aggregate and micro-level data during the past few decades. The results from the aggregate data reveal that an improvement in regional economic conditions measured by the employment-to-population rate produces a decrease in alcohol mortality. However, the great slump of the early 1990s is an exception to this pattern. During that particular episode, alcohol mortality did indeed decline, as there was an unprecedented collapse in economic activity. The results from the micro-data show that an increase in the employment-to-population rate and expansion in regional GDP produces an increase in alcohol consumption while having no effect on the probability of being a drinker. All in all, the Finnish evidence presented does not overwhelmingly support the conclusions reported for the USA, according to which temporary economic slowdowns are good for health. In contrast, at least alcohol mortality seems to increase in those bad times that are not exceptional economic crises like the one experienced in the early 1990s. However, there is evidence that alcohol consumption is strongly procyclical by its nature. This suggests that alcohol consumption and mortality may be delinked in the short-run business cycle context.alcohol mortality, drinking, business cycles

Does physical capacity explain the height premium?

The paper examines the role of physical capacity in the determination of the height premium by using the “Health 2000 in Finland” data that contain both self-reported information on the physical strenuousness of work, and information on muscle mass from medical examinations. Our results show that the height premium does not vary according to the physical strenuousness of work. We also find that muscle mass is not related to wages. Furthermore, we observe that the shortest men do physically very demanding work and the tallest do sedentary work, even after controlling for the effects of age and education.Height; Height premium; Body composition; Wages

Economic Inequality and Health: Looking Beyond Aggregate Indicators

This paper examines the relationship between relative income inequality and health in Finland, using individual microdata over the period 1993-2005. Our data allows us to analyse a large spectrum of health indicators. Overall, our results suggest that income inequality is not associated with increased morbidity in the population. The results for women differ to quite a large extent from those of men and the pooled sample. There is evidence that an increase in the Gini coefficient is negatively related to the probability of good physical health and no disability retirement. For men, relative income inequality is clearly not important for health.Health, health behaviour, economic inequality, relative income inequality, relative deprivation, Gini coefficient

Creative destruction and employee well-being

We examine the effects of establishment- and industry-level labor market turnover on employees’ job satisfaction and perceived job insecurity. Our linked employer-employee panel data contain both information on employees’ subjective well-being and register-based information on job and worker flows. The results show that job destruction and worker outflow measures reduce job satisfaction and, especially, perceived security. These effects are much weaker when the individual-specific fixed effects are taken into account. The evidence also reveals that the establishment-level job and worker flows do not translate into higher wages. These findings speak against the existence of compensating wage differentials for job uncertainty

Does a Slump Really Make You Thinner? Finnish Micro-level Evidence 1978-2002

This paper explores the relationship between obesity and economic conditions in Finland, using individual microdata from 1978 to 2002. The results reveal that an improvement in regional economic conditions measured by the employment-to-population ratio produces a decrease in obesity over the period of investigation, other things being equal. This effect arises from the decline in the height-adjusted weight of people who are deeply overweight, (BMI>35). In addition, the effect is strongest for the people in later middle age (aged 45-65). The incidence of obesity is unrelated to the regional growth rate. All in all, the Finnish evidence presented does not support the conclusions reported for the USA, according to which temporary economic slowdowns are good for health. In contrast, at least overweight increases during slumps.overweight, business cycles, health

Heritability of Lifetime Income

Using 15 years of data on Finnish twins, we find that 24% (54%) of the variance of women’s (men’s) lifetime income is due to genetic factors and that the contribution of the shared environment is negligible. We link these figures to policy by showing that controlling for education reduces the variance share of genetics by 5-8 percentage points; by demonstrating that income uncertainty has a genetic component half the size of its variance share in lifetime income; and by exploring how the genetic heritability of lifetime income is related to the macroeconomic environment, as measured by GDP growth and the Gini-coefficient of income inequality