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This paper investigates whether education and working in a physically demand-ing job causally impact temporary work incapacity, i.e. sickness absence, andpermanent work incapacity, i.e. the inflow to disability via sickness absence.Our contribution is to allow endogeneity of both education and occupation byestimating a quasi-maximum-likelihood discrete factor model. Data on sicknessabsence and disability spells for the population of older workers come from theDanish administrative registers for 1998-2002. We generally find an independent role of both education and occupation on temporary work incapacity only. Having at least primary education reduces women's (men's) probability of temporary work incapacity by 16% (38%) while working in a physically demanding job increases it by 37% (26%). On the other hand, conditional on sickness absence, the effects of education and occupation on permanent work incapacity are generally insignificant.

Using a matched insurant-general practitioner panel data set, we estimated the effect of a general health-screening program on individuals' health status and health care cost. To account for selection into treatment, we used regional variations in the intensity of exposure to supply-determined screening recommendations as an instrumental variable. We found that screening participation substantially increased inpatient and outpatient health care costs for up to two years after treatment. In the medium term, we found cost savings in the outpatient sector, whereas in the long run, no statistically significant effects of screening on either health care cost component could be discerned. In summary, screening participation increases health care costs. Since we did not find any statistically significant effect of screening participation on insurants' health status at any point in time, we do not recommend a general health-screening program. However, given that we found some evidence for cost-saving potentials for the sub-sample of younger insurants, we suggest more targeted screening programs.

In most countries, employers are financially responsible for sick pay during an initial period of a worker's absence spell, after which the public insurance system covers the bill. Based on a quasi-natural experiment in Norway, where pay liability was removed for pregnancy-related absences, we show that firms' absence costs significantly affect employees' absence behavior. However, by restricting pay liability to the initial period of the absence spell, firms are discouraged from letting long-term sick workers back into work, since they then face the financial risk associated with subsequent relapses. We show that this disincentive effect is statistically and economically significant.

This paper interprets accidents occurring on the way to and from work as negative health shocks to identify the causal effect of health on labor market outcomes. We argue that in our sample of exactly matched treated and control workers, these health shocks are quasi-randomly assigned. A fixed-effects difference-in-differences approach estimates a negative and persistent effect on subsequent employment and income. After initial periods with a higher incidence of sick leave, treated workers are more likely unemployed, and a growing share of them leaves the labor market via disability retirement. Those treated workers, who manage to stay in employment, incur persistent income losses. The effects are stronger for sub-groups of workers who are typically less attached to the labor market.

We analyse the role of health in determining the difference between desired and actual hours of work in a sample of German men using the Socio-Economic Panel Data for years 1996-2007. The effects of both self-assessed health and legal disability status are examined. About 60% of employees report working more than they would wish with the mean difference of -3.9 hours/week. We estimate static and dynamic model specifications allowing for autoregressive nature of the dependent variable and testing for the role of lagged health status. Important differences are found between east and west German Länder. In the west we find statistically significant role of general health measures in determining the disequilibrium. Employees in bad health want to work on average by about 0.4 hour/week less according to the static specification, and by about 1 hour/week less if dynamics of health and of the disequilibrium are taken into account. This is respectively 10% and 25% of the mean difference. We find no effects of legal disability status on the disequilibrium which we interpret as a reflection of stronger legal position of disabled employees. In both east and west we find significant state dependence in the hours disequilibrium.

This paper analyzes the effect of severity of disability on labour force participation by using a self-reported work limitation scale. A dynamic labour force participation model is used to capture the feedback effect of past participation on current participation. The results suggest that net of persistence and unobserved heterogeneity, differences in severity levels explain a significant portion of the variance in the participation rates among disabled individuals. Moreover, the disability is shown to have longer lasting adverse effects on female participation and work limited women will be more likely to benefit from the work requirements imposed on Disability Support Pension recipients.

This paper studies the evolution of early retirement due to disease and injury in the German labor force between 1988 and 2004. Using data from the German Federation of Public Pension Providers, the IMS Health Drug Launches database and the WHO Mortality Database, we show that new drug launches have substantially helped to reduce the loss of labor at the disease-level over time. We employ a variety of econometric methods to exploit the pseudo-panel structure of our dataset and find that in Western Germany alone each new chemical entity has on average saved around 200 working years in every year of the observation period. Controlling for individual determinants of health-related retirement, such as worker's age, sex and type of work, we also find evidence that the 2001 reform of pension laws has led to further reductions in the loss of labor from disease and injury.

We use structural estimation techniques to analyze labour supply effects of changes in economic incentives for individuals who have just finished vocational rehabilitation in Norway. The complicated and sometimes non-convex budget sets for this group are accounted for. Focus is also on the limitation in the choice sets this group face. Parametric bootstrap and simulation techniques are applied to construct confidence intervals for the predicted impacts of changes in the economic environment. The results show that there is a small to moderate effect of changes in economic incentives on the extent to which vocational rehabilitation brings individuals back to work. We also find that individual health status and local labour market conditions are the most important factors affecting the transition from rehabilitation to work.

Regional unemployment rates in Great Britain have narrowed dramatically in recent years. However, significant differences still remain in terms of both employment and economic inactivity rates, which may now better reflect relative labour market performance. This paper examines these differences in labour market outcomes using a unified empirical framework that decomposes regional differences in employment, economic inactivity and unemployment into components due to either structural or composition effects. The analysis highlights the important role that ill health and structural deficits currently play in accounting for regional differences in both employment and economic inactivity rates.

The success of health economics and its guidance for health policy heavily rests on the availability of reliable empirical evidence on the demographic, economic, and epidemiological environment, on behavioral relationships, and on the impact of policy interventions. For Sub-Saharan Africa, especially the epidemiological situation is unclear, since comprehensive systems of mortality and health statistics are often absent. The economic analysis of health naturally places a special focus on the interrelation between health and economic well-being: the overall disease burden decreases when a country grows richer, and the share of communicable diseases decreases in the process of economic development, whereas the share of non-communicable diseases increases. In those parts of Sub-Saharan Africa that are mainly dominated by traditional subsistence farming, however, it is difficult to examine questions of income and health for simple fundamental reasons. A vital prerequisite for an empirical investigation is the thorough and accurate measurement of income. Yet, both the measurement of the burden of disease and the measurement of income are research tasks that are far from being fulfilled for Sub-Saharan Africa. A further issue that is related with economic well-being and health is education. For poor rural regions predominated by traditional subsistence farming it is far from clear whether investments in human capital are worthwhile. The present study addesses this research gap by producing empirical evidence on the measurement of the burden of disease, the structure of income, and returns to education in rural West Africa. Concretely it deals with the collection and analysis of mortality, morbidity, and socio-economic data in the Nouna Health District in the North-West of Burkina Faso. The study was accepted as a doctoral thesis at the University of Heidelberg. Earlier versions of some of its chapters have been published as working papers or in international journals.

Sickness absence tends to be negatively correlated with unemployment. This may suggest disciplining effects of unemployment but may also reflect changes in the composition of the labour force. A panel of Norwegian register data for the years 1990-1995 is used to analyse sickness absences lasting more than two weeks. We estimate fixed effects models of the probability of absence and the number of days on sick leave conditional on absence. The county unemployment rate is found to affect the probability of absence negatively. When restricting the sample to workers who are present in the whole sample period, the negative relationship between absence and unemployment remains. The evidence on duration goes in the same direction. This indicates that the revealed procyclical variation in sickness absence is not driven by changes in the composition of the labour force.

We investigate the duration of time until the first work resumption for a cohort of people who receive disability insurance benefits. One of the peculiarities of the disability insurance program under investigation is that the level of benefits not only depends on previous wages, but also declines over time according to a schedule based on age, the amount of work experience, and the level of disability. As a result, different people will face different benefit schedules and hence are likely to make different choices regarding a return to work. To fully absorb the structural aspect of the disability program, we specify and estimate a behavioral labor supply model where individuals receive job offers that they can accept or decline. Possible reforms of the disability program are evaluated, including ending the disability program altogether.

Das Ziel der vorliegenden Untersuchung besteht darin, die wesentlichen Determinanten für das Auftreten von Fehlzeiten zu analysieren. In einem ersten Schritt werden die institutionellen Rahmenbedingungen der Entgeltfortzahlung und ihre historische Entwicklung aufgezeigt. Die Analyse insbesondere der tarifvertraglichen Regelungen ergibt, daß nur relativ wenige Arbeitnehmer direkt von den Auswirkungen der Entgeltfortzahlung betroffen sind. Dementsprechend gering werden die Auswirkungen der gesetzlichen Neuregelungen zur Entgeltfortzahlung in den Jahren 1996 und 1999 veranschlagt. Daran anschließend werden die Ausgaben der Arbeitgeber für die Einkommenssicherung der Arbeitnehmer im Krankheitsfalle untersucht. Diese Analyse ergibt, daß eine Absenkung der Entgeltfortzahlung von 100 auf 80 Prozent selbst bei Annahme einer vollständigen Übernahme der eingeschränkten Entgeltfortzahlung in die Tarifverträge die direkten effektiven Arbeitskosten um lediglich 0,45 Prozent reduzieren würde. Der letzte Schritt dieser Untersuchung zieht das Deutsche Sozio-ökonomische Panel zur empirischen Analyse heran. Dabei deutet bereits die deskriptive Analyse dieser Daten auf eine Fortsetzung des fallenden Trends bei der Entwicklung der gesamtwirtschaftlichen Fehlzeiten hin. So werden im Vergleich zum Verarbeitenden Gewerbe für den Dienstleistungssektor wesentlich niedrigere Fehlzeiten beobachtet, wobei davon ausgegangen wird, daß die Bedeutung des Verarbeitenden Gewerbes aufgrund des Strukturwandels auch weiterhin zurückgeht. Die Ergebnisse für die Random-Effects-Modelle, die mit den Daten des Deutschen Sozioökonomischen Panels geschätzt werden, bestätigen insbesondere die zentrale Bedeutung der Arbeitslosigkeit für die Höhe der Fehlzeiten. Weiterhin bestätigt die empirische Analyse, daß sowohl eine Beschäftigung im öffentlichen Dienst als auch eine Beschäftigung in einem großen Unternehmen die Fehlzeiten signifikant erhöht. Für die weiblichen Arbeitnehmer wird zudem ein signifikant positiver Einfluß der Arbeitszeit auf das Auftreten von Fehlzeiten festgestellt.