Health shocks and couples' labor market participation: A turning point or stuck in the trajectory?

Abstract

A health shock can have lasting consequences for the employment of not only the individuals experiencing it, but also their spouses. In this article, we complement the individual approach to the impact of health shocks with a dyadic perspective and show how employment opportunities and restrictions within couples are interdependent in the face of severe illness. We investigate whether the association between male spouses' health shocks and couples' employment trajectories depends on household specialization and both spouses' education. Multichannel sequence analysis is applied to retrospective life-course data from the Survey for Health, Ageing and Retirement in Europe for couples with health shocks and their matched controls (N=1022). By identifying typical employment trajectories, we find that health shocks are negatively associated with trajectories where both spouses continue in full-time employment and positively with trajectories where the man retires while the woman continues working and where both spouses retire simultaneously. Couples' trajectories differ according to the spouses' combined education levels. Findings suggest that health shocks may exacerbate economic inequalities within and between couples.