Labour market conditions and adult health in Mexico

Abstract

AbstractThis paper examines the role of local labour market conditions on self‐reported adult physical and mental health and health behaviours in Mexico. We construct measures of overall and gender‐specific predicted employment growth rates using a shift‐share approach that exploits exogenous variation in national industry‐specific growth rates and baseline industry employment shares across municipalities. Using detailed household‐level panel data and individual fixed effects, we find that increases in overall formal labour demand improve physical health of men but have no effect on the health of women. However, increases in gender‐specific formal labour demand improve the physical health of both men and women, with larger effects among men. We also find significant but small effects of male labour demand on the mental health of men. All effects are more pronounced for less educated people. Finally, we explore a range of potential mechanisms, finding that the effects might operate through changes in labour market outcomes, but we do not find evidence that the effects operate through changes in health behaviours.