Essays on Health and Economic Outcomes over the Life-Course

Abstract

This dissertation studies how health and health policies impact economic outcomes like earnings, employment, disability application, and wealth accumulation throughout the life course. The first two chapters focus on the role of childhood health in shaping life-long economic inequality. The third paper focuses on outcomes after disability onset in midlife and the role of employer-sponsored health insurance. Chapter 1 investigates the role of childhood health on economic outcomes over the life-cycle using uniquely detailed data from the Health and Retirement Study with a linkage to Social Security administrative earnings records. I first present several key facts about the role of childhood health in long-term economic outcomes: childhood health is associated with substantial gaps in earnings and employment throughout the prime working years; gaps peak in midlife when poorer childhood health is associated with a 7.5 percentage point reduction in employment and a reduction of $6,000 in earnings; and these gaps translate to substantial gaps in wealth in retirement. I then implement a quasi-experimental approach using variation in access to the measles vaccine upon its introduction to test for a causal effect of childhood health on later-life economic outcomes. While I find no evidence for a causal link between the measles vaccine and later life outcomes, my results reflect a need to better understand the specific channels through which childhood health effects persist. Chapter 2 extends on work in Chapter 1 and investigates the role of childhood health in shaping racial economic inequality over the life course. Many of the same structural and systemic barriers that impact racial economic disparities have also produced disparities in child health among Black Americans, and childhood health has consistently been shown to be a predictor of labor market and human capital outcomes later in life. Using data from the Health and Retirement Study with a linkage to Social Security Administration earnings records, I find that poorer childhood health is associated with disproportionately large reductions in earnings and employment for Black respondents over the life course compared to White respondents. In Oaxaca-Blinder decompositions, I find that up to 2.4% of the earnings gap and 12.2% of the employment gap in my sample can be attributed to childhood health, with the contribution being greatest in midlife. Conversely, childhood health has little role in shaping Black wealth or the Black-White wealth gap, likely reflecting the greater influence of other factors in shaping these outcomes. These results highlight a small, but potentially important impact of childhood health as well as the need to continue addressing structural barriers to racial economic equality in the U.S. Chapter 3 (with Nicole Maestas and Kathleen Mullen) studies the potential for “employment lock”, a phenomenon where individuals are reluctant to leave their current job due to fear of losing their employer-sponsored health insurance coverage, among workers experiencing the onset of a new disability. We use prospective longitudinal data on newly disabled older workers from the Health and Retirement Study to examine the effect of employer sponsorship of health insurance (ESHI) on post-onset employment and disability insurance claiming. We compare outcomes of workers with ESHI and no access to another coverage source immediately prior to onset with outcomes of two comparison groups: individuals with ESHI who also have access to an alternative coverage source, those who are covered by coverage source other than ESHI prior to onset. We find limited evidence of “employment lock” only when restricting to newly disabled older workers. We find no evidence that ESHI impedes application for Social Security Disability Insurance, but ESHI is associated with higher rates of disability receipt for newly disabled older workers.