The causal impact of health status on labour market outcomes: consequences for individuals and households University of Sheffield

About 2 mins to read

Led by the University of Sheffield, in partnership with the University of York and VU University, The Netherlands.
This project estimated the causal impact of health status on labour market outcomes, such as employment, productivity, wages, and absenteeism. This research aimed to fill the evidence gap to ultimately inform policy aimed at maximising participation in employment through reducing the disability employment gap and sickness absence.
The team used econometric techniques to provide new UK evidence on the relationships between health status and work outcomes.

This research project has been led by the University of Sheffield aimed to shed new light on the causal relationships between an individual’s health status and work outcomes, such as employment, productivity, wages, and absenteeism.

Work is a key route to financial security and psycho-social wellbeing and is generally good for people’s health. But there can be adverse effects stemming from long hours, stress, and job insecurity.

Health is an important determinant of employment, affecting a person’s chances of gaining employment and adequate reward.

Deterioration in health is often the catalyst for people leaving the labour market, and people with poor health have a much lower employment rate than the rest of the population. This impacts not only on individuals and households but employer performance, productivity levels and economic growth. With long-term conditions increasing among the working age population, strategies are needed to maintain health status and participation.

This project involved establishing the role of physical and mental health on determining outcomes such as employment, hours, and wages. It also explored the influence of poor health on employer outcomes, such as productivity and absenteeism.

The project team has primarily used data from the UK Household Longitudinal Study and the Quarterly Labour Force Survey to analyse the impact of factors such as age, gender, job/contract type, health status and household type on the relationship between an individual’s health and their participation in work. Econometric techniques (applying mathematical and statistical models to test economic hypotheses) have been employed to estimate these complex relationships.

The research can inform policy development o maximise participation in work in the context of issues such as the ageing population, extended working lives, increased prevalence of chronic disease and the need to reduce the burden of social security provision.