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Health and Wages: Panel Data Estimates Considering Selection and Endogeneity

Health and Wages: Panel Data Estimates Considering Selection and Endogeneity This paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity, sample selection, and endogeneity in one comprehensive framework. Using data from the German Socio-Economic Panel (GSOEP), we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary. Good health leads to higher wages for men, while there appears to be no significant effect for women. Contingent on the method of estimation, healthy males earn between 1.3 percent and 7.8 percent more than those in poor health. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Health and Wages: Panel Data Estimates Considering Selection and Endogeneity

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Publisher
University of Wisconsin Press
ISSN
1548-8004

Abstract

This paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity, sample selection, and endogeneity in one comprehensive framework. Using data from the German Socio-Economic Panel (GSOEP), we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary. Good health leads to higher wages for men, while there appears to be no significant effect for women. Contingent on the method of estimation, healthy males earn between 1.3 percent and 7.8 percent more than those in poor health.

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Apr 4, 2012

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