The impact of diabetes on employment: genetic IVs in a bivariate probit

Diabetes has been shown to have a detrimental impact on employment and labor market productivity, which results in lost work days and higher mortality/disability. This study utilizes data from the Border Epidemiologic Study on Aging to analyze the endogeneity of diabetes in an employment model. We use family history of diabetes as genetic instrumental variables. We show that assuming that diabetes is an exogenous variable results in an overestimate (underestimate) of the negative impact of diabetes on female (male) employment. Our results are particularly relevant in the case of populations where genetic predisposition has an important role in the etiology of diabetes.     

The impact of diabetes on adult employment and earnings of Mexican Americans: findings from a community based study

Epidemiological studies indicate that minority populations in the US - including African Americans, Native Americans and Mexican Americans - are particularly at risk for diabetes and that their complications are more frequent and severe. Using microdata from a 1994-1999 population based study of middle aged and older Mexican Americans in the Southwest, this study analyzes the impact of diabetes on the employment and earnings outcomes of adults 45 years of age and older. The empirical results from estimating maximum likelihood employment and earnings models suggest that diabetes leads to lower productivity and earnings for women but has no statistically significant impact on their employment probability. In the case of men, however, diabetes leads to a lower employment propensity but has no effect on earnings. Thus, the problems associated with this condition could lead to potential future financial difficulties particularly for high-risk populations in their later years.     

Health,work and working conditions: a review of the European economic literature

Economists have traditionally been very cautious when studying the interaction between employment and health because of the two-way causal relationship between these two variables: health status influences the probability of being employed and, at the same time, working affects the health status. Because these two variables are determined simultaneously, researchers control endogeneity skews (e.g., reverse causality, omitted variables) when conducting empirical analysis. With these caveats in mind, the literature finds that a favourable work environment and high job security lead to better health conditions. Being employed with appropriate working conditions plays a protective role on physical health and psychiatric disorders. By contrast, non-employment and retirement are generally worse for mental health than employment, and overemployment has a negative effect on health. These findings stress the importance of employment and of adequate working conditions for the health of workers. In this context, it is a concern that a significant proportion of European workers (29 %) would like to work fewer hours because unwanted long hours are likely to signal a poor level of job satisfaction and inadequate working conditions, with detrimental effects on health. Thus, in Europe, labour-market policy has increasingly paid attention to job sustainability and job satisfaction. The literature clearly invites employers to take better account of the worker preferences when setting the number of hours worked. Overall, a specific “flexicurity” (combination of high employment protection, job satisfaction and active labour-market policies) is likely to have a positive effect on health.     

The effect of health changes and long-term health on the work activity of older Canadians

Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible problems with self-reported health, including endogeneity and measurement error, and (2) the relative importance of health changes and long-term health in the decision to work. We contrast estimates of the impact of health on employment using self-assessed health, an objective health index contained in the NPHS - the HUI3, and a 'purged' health stock measure. Our results suggest that health has an economically significant effect on employment probabilities for Canadian men and women aged 50-64, and that this effect is underestimated by simple estimates based on self-assessed health. We also corroborate recent US and UK findings that changes in health are important in the work decision.     

The effect of managed care on use of health care services: results from two contemporaneous household surveys

This paper estimates treatment effects of managed care plans on the utilization of health care services using data from two contemporaneous, nationally representative household surveys from the USA. The paper exploits recent advances in simulation-based econometrics to take the endogeneity of enrollment into managed care plans into account and identify the causal relationship between managed care enrollment and utilization. Overall, results from the two surveys are remarkably similar, lending credibility to their external validity and to the econometric model and estimation methods. There is significant evidence of self-selection into managed care plans. After accounting for selection, an individual enrolled in an health maintenance organization (HMO) plan has 2 more visits to a doctor and has 0.1 more visits to the emergency room per year than would the same individual enrolled in a nonmanaged care plan.     

People are not passive acceptors of threats to health: endogeneity and its consequences

The effect of behaviour on health is a major area of contemporary epidemiological enquiry. Most epidemiological studies of the effect of behaviour on health assume that the levels of the behaviour-related variables are determined by factors other than those under study. However, in many instances, obvious examples are breastfeeding and smoking, not only do behaviours affect health but, conversely, individuals take into account their (observable and non-observable) health conditions when making behavioural decisions. In models which allow for the joint determination of health and behaviour, both health and behavioural variables are 'endogenous', that is, determined by forces acting within the model. Through some simple didactic examples it is shown that estimates of the effect of behaviour on health are biased if endogeneity is ignored. Review of the small empirical literature on this subject shows perverse results, such as a negative relationship between the use of prenatal care and infant mortality, when endogeneity is ignored. Standard procedures for taking account of the effects of endogeneity are described briefly.     

Chronic diseases and labour force participation in Australia

We examine the impact of several chronic diseases on the probability of labour force participation using data from the Australian National Health Surveys. An endogenous multivariate probit model is used to account for the potential endogeneity of the incidence of chronic conditions such as diabetes, cardiovascular diseases and mental illnesses. The cross-equation correlations are significant, rejecting the exogeneity of the chronic illnesses. Marginal effects of exogenous socio-demographic and lifestyle variables are estimated through their direct effects on labour market participation and indirect effects via the chronic diseases. The treatment effects of chronic diseases on labour force participation are estimated via conditional probabilities using five-dimensional normal distributions. The estimated effects differ by gender and age groups. Although computationally more demanding, these treatment effects are compared with results from a univariate model treating the chronic conditions exogenous and the structural effects from the multivariate probit model; both significantly overestimate the effects.     

The chicken or the egg? Endogeneity in labour market participation of informal carers in England

Around 14% of the UK labour force has informal care responsibilities and almost everyone in society will be an informal carer in their lifetime. A well-known fact in the small economic literature on informal care is the apparent negative relation between care responsibilities and labour market participation. Yet, caring and labour market participation may be endogenous. Using an instrumental variable approach and panel data techniques and employing data from the British Household Panel Study from 1991 to 2002, this paper shows that not accommodating for endogeneity in the labour market participation equation may significantly overestimate the impact care exhibits on the employment decision of informal carers. Moreover, it is shown that a negative impact on employment only applies to some care-types. Policy implications are derived.     

The effect of diabetes on female labor force decisions: new evidence from the National Health Interview Survey

This paper estimates the effect of diabetes on labor-force participation, hours worked, days-out-of-work due to illness, and earnings using data from the National Health Interview Survey. Findings indicate that diabetes, estimated wholly, is significantly detrimental to most labor market outcomes. However, separation of type I and II diabetes shows that much of the negative effect is due to type II diabetes. On average a female with type II diabetes can experience a wage penalty of almost 50% relative to a healthy individual. Additionally, estimates of specifically type II diabetes may be subject to endogeneity bias. To account for this, I utilize whether an individual's biological mother has been diagnosed with diabetes as an instrumental variable. This instrument provides both theoretical and statistical explanatory power to separate the causal effect of type II diabetes on labor-force decisions.     

Down and out: estimating the relationship between mental health and unemployment

We utilized a unique dataset of Montreal residents to estimate the relationship between employment and mental health, controlling for endogeneity. We applied a maximum likelihood, simultaneous equation generalized probit model to estimate jointly the determinants of an individual's latent index of employability and their mental health as measured by the Psychiatric Symptom Index (PSI). The likelihood function was adjusted to account for the fact that individuals were sampled based on their employment status, and also for the fact that repeated observations of individuals in different periods were used in the analysis. We found tangible beneficial effects of mental health on employability. In addition, employment appears to improve mental health. The ML estimates of the endogenous relationship between employment and mental health indicate that OLS estimates are biased upwards, but the effects of unemployment on deteriorating mental health are not spurious. © 1997 John Wiley & Sons, Ltd.     

Health status and labour force participation: evidence from Australia

This paper examines the effect of health on labour force participation using the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The potential endogeneity of health, especially self-assessed health, in the labour force participation equation is addressed by estimating the health equation and the labour force participation equation simultaneously. Taking into account the correlation between the error terms in the two equations, the estimation is conducted separately for males aged 15-49, males aged 50-64, females aged 15-49 and females aged 50-60. The results indicate that better health increases the probability of labour force participation for all four groups. However, the effect is larger for the older groups and for women. As for the feedback effect, it is found that labour force participation has a significant positive impact on older females' health, and a significant negative effect on younger males' health. For younger females and older males, the impact of labour force participation on health is not significant. The null-hypothesis of exogeneity of health to labour force participation is rejected for all groups.     

Workplace Accommodation as a Social Process

Successful sustained employment for people with disabilities is a function of a complex array of factors. Key among these factors is appropriate accommodation at the workplace. Current approaches to accommodation, however, are often unsuccessful. Research suggests that this is due, in part, to the limited view of accommodation as technical changes to the job. An approach to accommodation that does not take into account the social context ignores the consequences of the process on work group morale and individual self-esteem and well-being. This has repercussions for individual job performance, job satisfaction and work retention, as well as overall work group productivity. An intervention was designed to take into account the social nature of the accommodation process and pilot tested with 12 workers who were out on a short term disability leave with a psychiatric diagnosis and their work groups. Based on a psychoeducational model, the intervention educates the work group about what it means to work with a disability, provides a safe environment where the worker with disability and coworkers can share concerns about the impact of accommodation on the group, informs about the accommodation process and specifies strategies to help the worker with disability best meet job requirements. Key intervention components include 1) the development of a disclosure plan since workplace intervention cannot occur without disclosure, 2) a systematic method for identifying the work group members, 3) a formal psychoeducation training that includes the supervisor, identified work group members, and the individual in the work organization who has the authority to approve accommodations, and 4) on-going follow up support to the supervisor and worker with disability. Although generalizability of the findings is limited because of the small sample size and its application only to those with mental health conditions, they support the importance of this approach to employment outcomes for people with disabilities. First, findings suggest that the rehabilitation process cannot stop at placement. Providers must be willing and able to enter the workplace with their clients. This requires providers to take on new roles such as educators, interpreters, negotiators and trainers. Disclosure must lose its status as a taboo topic. Providers and workers with disabilities must come to understand the risks and benefits of disclosure, and, when the decision is made to disclose, must have a formal, structured plan for carrying it out. Finally, workplace intervention must take into account the social context and provide the opportunity for communication and interaction in order to insure the success of the accommodations.     

Does Every Minute Really Count? Road Time as an Indicator for the Economic Value of Emergency Medical Services

ObjectivesThis article builds on the literature regarding the association between emergency medical service (EMS) response times and patient outcomes (death and severe injury). Three issues are addressed in this article with respect to the empirical estimation of this relationship: the endogeneity of response time (systematically quicker response for higher degrees of urgency), the nonlinearity of this relationship, and the variation between such estimations for different patient outcomes.MethodsBinomial and multinomial logistic regression models are used to estimate the impact of response time on the probabilities of death and severe injury using data from French Fire and Rescue Services. These models are developed with response time as an explanatory variable and then with road time (dispatch to arrival) hypothesized as representing the exogenous variation within response time. Both models are also applied to data subsets based on response time intervals.ResultsThe results show that road time yields a higher estimate for the impact of response time on patient outcomes than (total) response time. The impact of road time on patient outcomes is also shown to be nonlinear. These results are of both statistical significance (model coefficients are significant at the 95% confidence level) and economical significance (when taking into account the number of annual interventions performed).ConclusionsWhen using heterogeneous data on EMS interventions where endogeneity is a clear issue, road time is a more reliable indicator to estimate the impact of EMS response time on patient outcomes than (total) response time.     

Does informal care from children to their elderly parents substitute for formal care in Europe?

This paper analyzes the impact of informal care by adult children on the use of long-term care among the elderly in Europe and the effect of the level of the parent's disability on this relationship. We focus on two types of formal home care that are the most likely to interact with informal care: paid domestic help and nursing care. Using recent European data emerging from the Survey on Health, Ageing and Retirement in Europe (SHARE), we build a two-part utilization model analyzing both the decision to use each type of formal care or not and the amount of formal care received by the elderly. Instrumental variables estimations are used to control for the potential endogeneity existing between formal and informal care. We find endogeneity of informal care in the decision to receive paid domestic help. Estimation results indicate that informal care substitutes for this type of formal home care. However, we find that this substitution effect tends to disappear as the level of disability of the elderly person increases. Finally, informal care is a weak complement to nursing care, independently of the level of disability. These results highlight the heterogeneous effects of informal care on formal care use and suggest that informal care is an effective substitute for long-term care as long as the needs of the elderly are low and require unskilled type of care. Any policy encouraging informal care to decrease long-term care expenditures should take it into account to assess its effectiveness.     

Are cardiovascular diseases bad for economic growth?

We assess the impact of cardiovascular disease (CVD) mortality on economic growth, using a dynamic panel growth regression framework taking into account potential endogeneity problems. In the worldwide sample we detect a non‐linear influence of working age CVD mortality rates on growth across the per capita income scale. Splitting the sample (according to the resulting income threshold) into low‐ and middle‐income countries, and high‐income countries, we find a robust negative contribution of increasing CVD mortality rates on subsequent five‐year growth rates in the latter sample. Not too surprisingly, we find no significant impact in the low‐ and middle‐income country sample. Copyright © 2009 John Wiley & Sons, Ltd.     

Self-Perceptions on the Impact of Diabetes Among Working Adults: Insights into Disability Prevention

Effective diabetes self-management requires persons to be active participants in their care to prevent poor function and maintain independence and employment. Persons' perceptions and understanding of the potential impact of the disease could influence their self-management practices and success. This study explores perceptions on the impact of diabetes on future independence and employment. Findings indicate that 34% of participants believed diabetes would affect their employment, and 57% believed it would impact their independence. Logistic regression analyses showed that participants who believed that diabetes would impact employment were more likely to be younger, Native Hawaiian, and in poor physical health and to have been diagnosed with diabetes for a longer period of time. Those concerned with future independence were more likely to be younger and in poor physical and mental health. Understanding the associations between individual characteristics and perceived future abilities may enable healthcare professionals to tailor health education, promotion, and maintenance interventions to the needs of specific sub-populations of diabetics.     

The effect of variable health insurance deductibles on the demand for physician visits

In order to contain cost in the health care sector, the introduction of consumer incentives in health insurance has been suggested and realized in many countries. The Swiss health system reform of 1996 introduced a choice of deductible for health services in the mandatory basic health insurance. This paper estimates the effect of this choice on physician service utilization. A generalized method of moments (GMM) estimator is applied to take account of the endogeneity of the choice of the deductible in the estimation of the number of physician visits. This paper finds that most of the observed reduction in the number of physician visits among individuals who choose a higher deductible seems to be a result of self-selection of individuals into the respective insurance contracts, and not to induced changes in utilization behaviour.     

Care-giver advice as a preventive measure for drinking during pregnancy: zeros, categorical outcome responses, and endogeneity

We conduct an empirical investigation of the impact of prenatal care-giver advice on alcohol consumption by pregnant women. In the design of the model and estimator, we pay particular attention to three aspects of the data. First, a large proportion of pregnant women do not drink at all. To accommodate this aspect of the sample we base the essential formulation of the model on the modified version of the two-part approach of Duan et al. (Journal of Business and Economic Statistics 1983; 1: 115-126.) suggested by Mullahy (Journal of Health Economics 1998; 17: 247-281.). Second, in the survey that we analyze (the 1988 National Maternal and Infant Health Survey - NMIHS), respondents were only required to report their consumption up to a specified range of values (e.g. 1-2 drinks per week, 2-5 drinks per week, and so on). For this reason, the model is cast in the grouped regression framework of Stewart (Review of Economic Studies 1983; 50: 141-149.). Third, the binary physician advice variable is likely to be endogenous and the econometric specification explicitly accounts for this possibility. To summarize the results, we find that failing to account for endogeneity leads to the counterintuitive conclusion that advice has a positive and statistically significant influence on drinking during pregnancy. When the model is extended to allow for potential endogeneity, we find that advice has a negative and statistically significant impact.     

Does job insecurity deteriorate health?

This paper estimates the causal effect of perceived job insecurity – that is, the fear of involuntary job loss – on health in a sample of men from 22 European countries. We rely on an original instrumental variable approach on the basis of the idea that workers perceive greater job security in countries where employment is strongly protected by the law and more so if employed in industries where employment protection legislation is more binding; that is, in induastries with a higher natural rate of dismissals. Using cross‐country data from the 2010 European Working Conditions Survey, we show that, when the potential endogeneity of job insecurity is not accounted for, the latter appears to deteriorate almost all health outcomes. When tackling the endogeneity issue by estimating an instrumental variable model and dealing with potential weak‐instrument issues, the health‐damaging effect of job insecurity is confirmed for a limited subgroup of health outcomes; namely, suffering from headaches or eyestrain and skin problems. As for other health variables, the impact of job insecurity appears to be insignificant at conventional levels. Copyright © 2014 John Wiley & Sons, Ltd.     

The effect of online gambling on gambling problems and resulting economic health costs in Germany

Problematic and pathological gambling have emerged as substantial problems in many countries. One potential accelerating factor for this phenomenon during recent years is the Internet, which offers different kinds of games and online applications for gambling that are faster, more attractive due to a variety of design and marketing options, less costly and potentially more addictive than terrestrial gambling opportunities. However, the contributing role of the Internet for problematic gambling has not been analyzed sufficiently so far and remains inconclusive. The current study is based on a representative sample with 15,023 individuals from Germany. With a new concept of assessing online gambling with its relative fraction of total gambling activities and a control-function approach to account for possible endogeneity of online gambling, we estimate the impact of online gambling on gambling behavior while additionally controlling for a rich set of important covariates, like education, employment situation and family status. The results show that, on average, replacing 10% of offline gambling with online gambling increases the likelihood of being a problematic gambler by 8.8–12.6%. This increase is equivalent to 139,322 problematic gamblers and 27.24 million € per year of additional expenditures in the German health sector. Our findings underpin the necessity to keep online gambling restricted to prevent further developments of problematic and pathological gambling in Germany.