Health Impacts on Future Labor Market Outcome: Exploring PSID Siblings

HwaJung Choi, University of Michigan

This paper investigates the association between one’s health status and future labor market outcome, controlling for unobservable family background. Exploring the Panel Study of Income Dynamics, empirical results show that one’s health status as a young adult is an important predictor of one’s adulthood employment status. This paper highlights that a sibling's health is also a significant determinant of employment status for women: with an unhealthy sibling, women are likelier to work in the labor market. This provides additional, important implication for identification strategy in measuring return to health: sibling health impact can be a bias source in the between-siblings model if a researcher ignores it. This paper contributes to further research in return to health by identifying various issues on empirical analysis regarding subjective health, family background and sibling model.