Abstract
T HE overall impact of poor health on earnings is large the average disabled man aged 18 to 64 years suffers a 37% reduction in yearly earnings. This loss is the result of the effects of poor health on all the components of earnings: labor force participation, weeks worked per year, hours worked per week, and earnings per hour. In each case there is a substantial effect of health, not just when a comparison is made between well and sick persons, but also when adjustments are made to account for the different socio-economic characteristics of the two groups. This analysis not only provides estimates of the effect of health on each component of earnings, but also the aggregate earnings loss attributable to long term disability 23 billion dollars in 1966. The first section outlines some of the previous analyses concerning the effects of health on the various components of earnings and briefly describes the data and method used in this study. The effects of health are usually measured by comparing the status of persons who are well with those who are disabled. The second and third sections offer this comparison as well as the true effects of health which are based on the difference between the current status of the disabled and their estimated status, based on how they would have behaved had they been well, taking into account the different socioeconomic characteristics of the well and disabled groups. The first of these two sections provides the comparisons for each of the components of earnings. As the analysis is carried out for subsamples of men and women, and blacks and whites, it is possible to examine the different ways in which disability affects different groups. The second section of the pair continues the analysis in terms of a more aggregate measure the overall loss of earnings to the economy within a year. A final section provides a brief summary and an outline of the major findings and conclusions.
Published Version
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