July 2011

IZA DP No. 5843: The Effect of an Acute Health Shock on Work Behavior: Evidence from Different Health Care Regimes

published in: Social Science and Medicine, 2015, 136-137,44-51

We study how severe acute health shocks affect the probability of not working in the U. S. versus in Denmark. The results not only provide insight into how relative disease risk affects labor force participation at older ages, but also into how different types of health care and health insurance systems affect individual decisions of labor force participation. We find that the effect of an acute health shock on labor force participation is stronger in the U.S. than in Denmark, and provide compelling evidence that this is the result of health care system-related differential mortality and baseline health differences.