Projects / Programmes
The impact of labour market events on health status
| Code |
Science |
Field |
Subfield |
| 5.02.01 |
Social sciences |
Economics |
Economy sciences |
| Code |
Science |
Field |
| S196 |
Social sciences |
Social economics |
| Code |
Science |
Field |
| 5.02 |
Social Sciences |
Economics and Business |
Unemployment, precarious work, retirement, health
Researchers (11)
Organisations (3)
Abstract
Background and motivation. Studies document that labour market events – unemployment, precarious work, and retirement – importantly affect the incidence of mental diseases, cardiovascular diseases, and diabetes. Our review of the literature, however, shows that these effects are under-researched. Studies on other countries often yield contradicting results, and they are sensitive to methods and specifications used. In Slovenia, no rigorous, scientific study of this kind has been performed. Yet there is growing concern about circumstances and trends that put the impact of labour market events on health in sharp relief. In Slovenia, in recent years the share of long-term unemployed has risen above 50 percent, much higher than the EU average. Moreover, the trend of growing employment flexibility is reflected in a rising prevalence of precarious employment – in particular, of temporary employment and of employment via temporary work agencies. And Slovenia has one of the lowest employment rates of older workers in the EU, so the looming pension reform promises to increase the statutory pensionable age – and in doing so, it better take into account the health effects of such an increase.
Objectives and research questions. To provide the necessary input for informed policy decisions on the above, extremely topical issues, the proposed project seeks to generate in-depth, rigorous studies examining the following questions: How do unemployment, precarious work and retirement affect the risk of mental diseases, cardiovascular diseases, and diabetes (these groups of diseases are focused upon by the project)? Do such effects vary between men and women and across socio-economic groups? Are adverse health effects associated with the duration of unemployment and precarious work? Moreover, in the light a pending pension reform, what are additional health risks of individuals who are forced to retire later, and how are these risks shared across various socioeconomic groups?
Methodology. The basic analytical tool for analysing the impact of labour market events on health will be the event history analysis, and we will use other econometric methods as well. The event history approach can easily handle the key methodological problem in evaluating the effects of labour market events on health – the problem of reverse causality. We will use the hazard function approach to model the probability of the change of the health status indicator, that is, of the occurrence of the studied diseases. Key covariates will be the labour market events focused upon by the study: transitions to unemployment, to precarious work, and to retirement. We will estimate effects of such transitions on health status, as well as of the duration spent in unemployment and precarious work. Other covariates will include personal and employment characteristics; with the exception of a subset of personal characteristics, other explanatory variables will also be time-varying. Other methods used will fixed effects models (augmented by instrumental variables approach) and logistic regression models.
Data. The proposed project will draw on extremely rich administrative data providing both labour market and health information on the entire population of Slovenia. Data from various sources will be merged on the basis of a personal identifier, and access to data and empirical analysis will take place in the Statistical Office’s “safe room”. Labour-market related data – containing individual information on work history, earnings, and unemployment – are available from 1991 to 2015, health and health-related data – containing data on prescriptions, inpatient treatments, sick leave and deceased persons – are available from 2000-2016 (for some databases availability is more limited). Health information will be used to construct morbidity and mortality indicators that will be used as dependent variables in the empirical analysis.
Significance for science
The proposed project will rigorously evaluate the effects of labor market events on health of individuals. Its contribution to science will be threefold:
The proposed key methodological tool – event history analysis – compares favorably with linear mixed effects models which are commonly used in this line of research. We will be able to use the event history analysis by taking advantage of the rich administrative data that the project rests upon, whereby individuals are followed in continuous time and where events are recorded with the starting and ending date as opposed to individuals being followed via successive panels and the information being recorded as panel data. Most of existing literature is based survey-based data which is not suitable for event history analysis.
The proposed project will shed light on questions about the health effects of labor market programs that have not been studied yet internationally. By linking health information of individuals not only with information about their employment history but also with information about their participation in active labor market programs and about their receipt of unemployment benefits, the project will be able to address the so far unexplored, but very relevant policy question of whether participation of the unemployed in labor market programs can help reduce negative health effects of unemployment.
The project will enrich current studies in all three areas of focus -- health effects of unemployment, precarious work and retirement – with innovative, in-depth and scientifically grounded results. As presented in the literature review section, current studies often yield inconsistent results that are sensitive to methods used, so further research is needed.
Significance for the country
The proposed research will generate in-depth, rigorous results on extremely topical issues, thus providing the necessary input for informed policy decisions. The current void of rigorous studies in Slovenia provides a strong rationale for such research. In particular:
In the area of retirement, the White paper on the pension reform (Ministry of Labour, Family, Social Affairs and Equal Opportunities, 2016a) proposes a gradual increase of both the statutory retirement age and the contribution period (for example, to 65 and 45 years, respectively), as well as the removal of an early retirement option. Such policy changes, however, need to be based on information on what the postponing of the retirement does to health and human wellbeing, that is, it needs to take into account health effects of the pension reform, in general and across various socioeconomic groups and occupations – and they to be accompanied by supplementary measures, if needed, to increase flexibility.
In the area of unemployment, OECD recommendations (Connecting People with Jobs, The Labour Market, Activation Policies and Disadvantaged Workers in Slovenia, OECD 2016) call for an increase of spending on active labour market programs. Finding out whether such programs help alleviate the health effects of unemployment – what is one of the goals of the proposed research – would provide additional rationale for the OECD recommendation and help with targeting of these programs as well.
And regarding precarious work, having one of the highest incidence of fixed-term jobs in EU, Slovenia should also look very carefully into health consequences of such an working arrangement, and implement further changes along the lines of the 2013 Employment Relations Act if necessary (its equity effects have been found very beneficial – see Vodopivec et al, Levelling the playing field: the effects of Slovenia's 2013 labour market reform, IZA Discussion Paper No. 9783, February 2016).
The proposed research will thus contribute to more effective and more equitable economic policy measures in areas where policy reforms are imminent, and ultimately help to enhance the overall socio-economic development of Slovenia. And, equally importantly, it will contribute to better health and increased well-being of Slovenian workers.
Most important scientific results
Final report
Most important socioeconomically and culturally relevant results
Final report
