Health Impairments, Work Limitations & Earnings

Abstract

Our analysis is based on the 2008 Athens Area Study and exploits detailed information regarding health impairments and labor market outcomes for Greek males. Distinguishing between healthy and heath-impaired employees who have or do not have work limitations, the unobserved productivity effect of health is separated from discrimination. We then estimate a regression model that includes terms to correct the employment selection and endogenous stratification on self-reported health condition. A penalty for productivity limitation exists. Evidence of wage discrimination is also found. Both findings are statistically significant and highlight the necessity of instituting active policies against unequal treatment.Ill-Health, Wage Discrimination, Labor Market Participation, Selection Model, Endogenous Switching Model