Health, Skills and Labor Market Success

This thesis deals with the interplay between education, labor markets and health. It consists of five studies exploiting large-scale administrative datasets from Sweden.

The first study asks if health and educational attainment are related within monozygotic twin (MZ) pairs. This is motivated by the literature using MZ twins to estimate the returns to schooling. If a healthier twin tends to get more education, these estimates would be plagued by a “health bias”. However, we find no evidence that health and education would be related within MZ twin pairs.

The second study examines the labor market consequences of health problems. Our analysis is based on most broad categories of health problems and we consider labor market outcomes along several dimensions, such as earnings and employment. We find that most types of health problems have negative effects and the strongest ones are obtained for mental problems.

The third study considers the effect of parental education on offspring outcomes. Our research design exploits a compulsory school reform. We find that more educated mothers get healthier and more skilled children. Paternal education has no significant effect on offspring outcomes however.

In the fourth study, we ask if less healthy or less skilled individuals are more affected by state of the labor market. To the extent that individuals are averse to labor market risk, such findings would suggest penalties on individuals that are already disadvantaged. We find that individuals in poor health or with low non-cognitive skills are more sensitive to unemployment than other groups.

The fifth study exploits a policy change to determine the price sensitivity of medical demand. We find that when visits became free of charge, individuals saw a doctor more often. The size of the response differs by income and health but not by educational attainment.