key topic

Health, well-being, and happiness in the labor market

With institutions and countries increasingly focusing on well-being, policymakers are recognizing that additional measures to GDP can be used to determine the state of their economies. Happiness data, for example, could help to reveal a more comprehensive picture of an economy.

Happiness is key to a productive economy, but many factors affect workers’ happiness as well as their health and well-being, including, for example, issues such as job security, unemployment, different management practices, and the acceptance of someone’s gender identity.

Given the ongoing global Covid-19 pandemic, policymakers should be aware that, as well as raising suicide rates, periods of economic downturn also increase the number of people suffering debilitating mental health problems, which significantly impact skills, productivity, and life satisfaction. Participation in sports and exercise is just one tool that could be used to boost workers’ productivity and earnings.

For new academic research on this topic, see IZA's discussion papers on health.

  • Individual and family labor market impacts of chronic diseases

    Chronic diseases worsen labor market outcomes, but firms’ hiring and retention policies can reduce them

    Amanda Gaulke, January 2021
    Chronic health conditions are a global concern and can impact labor market outcomes of those diagnosed and their caregivers. Since the global prevalence of many chronic health conditions is on the rise, it is important to know what firms can do to retain and hire workers who are impacted. Firms can improve hiring by addressing biases against potential employees with chronic health conditions. Furthermore, firms can retain impacted workers by offering workplace flexibility such as partial sick leave, work hour flexibility, and part-time work options.
    MoreLess
  • Health effects of job insecurity Updated

    Job insecurity adversely affects health, but employability policies and otherwise better job quality can mitigate the effects

    Francis Green, December 2020
    The fear of unemployment has increased around the world in the wake of Covid-19. Research has shown that job insecurity affects both mental and physical health, though the effects are lower when employees are easily re-employable. The detrimental effects of job insecurity could be partly mitigated if employers improved other aspects of job quality that support better health. But as job insecurity is felt by many more people than just the unemployed, the negative health effects during recessions are multiplied and extend through the majority of the population. This reinforces the need for effective, stabilising macroeconomic policies, most especially at this time of pandemic.
    MoreLess
  • Men without work: A global well-being and ill-being comparison

    The number of prime-age males outside the labor force is increasing worldwide, with worrying results

    Carol GrahamSergio Pinto, October 2019
    The global economy is full of progress paradoxes. Improvements in technology, reducing poverty, and increasing life expectancy coexist with persistent poverty in the poorest countries and increasing inequality and unhappiness in many wealthy ones. A key driver of the latter is the decline in the status and wages of low-skilled labor, with an increasing percentage of prime-aged men (and to a lesser extent women) simply dropping out of the labor force. The trend is starkest in the US, though frustration in this same cohort is also prevalent in Europe, and it is reflected in voting patterns in both contexts.
    MoreLess
  • Obesity and labor market outcomes Updated

    The hidden private costs of obesity: lower earnings and a lower probability of employment

    Susan L. Averett, August 2019
    Rising obesity is a pressing global public health problem responsible for rising health care costs and in some countries one of the leading causes of preventable deaths. There is substantial evidence that obese people are less likely to be employed and, when employed, earn lower wages. There is some evidence that the lower earnings are a result of discriminatory hiring and sorting into jobs with less customer contact. Understanding whether obesity is associated with adverse labor market outcomes and ascertaining the source of these outcomes are essential for designing effective public policy.
    MoreLess
  • Happiness as a guide to labor market policy Updated

    Happiness is key to a productive economy, and a job remains key to individual happiness, also under robotization

    Jo Ritzen, January 2019
    Measures of individual happiness, or well-being, can guide labor market policies. Individual unemployment, as well as the rate of unemployment in society, have a negative effect on happiness. In contrast, employment protection and un-employment benefits or a basic income can contribute to happiness—though when such policies prolong unintended unemployment, the net effect on national happiness is negative. Active labor market policies that create more job opportunities increase happiness, which in turn increases productivity. Measures of individual happiness should therefore guide labor market policy more explicitly, also with substantial robotization in production.
    MoreLess
  • The complex effects of retirement on health

    Retirement offers the potential for improved health, yet also creates the risk of triggering bad health behavior

    Andreas Kuhn, March 2018
    Retirement offers the opportunity to give up potentially risky, unhealthy, and/or stressful work, which is expected to foster improvements in retirees’ health. However, retirement also bears the risk that retirees suffer from the loss of daily routines, physical and/or mental activity, a sense of identity and purpose, and social interactions, which may lead them to adopt unhealthy behaviors. Depending on the relative importance of the different mechanisms, retirement may either improve or cause a deterioration of retirees’ health, or eventually have no effect on it at all.
    MoreLess
show more