IZA World of Labor

Health

  • Air pollution and worker productivity

    Higher levels of air pollution reduce worker productivity, even when air quality is generally low

    Matthew Neidell, June 2017
    Environmental regulations are typically considered to be a drag on the economy. However, improved environmental quality may actually enhance productivity by creating a healthier workforce. Evidence suggests that improvements in air quality lead to improvements in worker productivity across a range of sectors, including agriculture, manufacturing, and the service sectors. These effects also arise at levels of air quality that are below pollution thresholds in countries with the highest levels of environmental regulation. The findings suggest a new approach for understanding the consequences of environmental regulations.
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  • How do candidates’ looks affect their election chances?

    Looks matter and can tip the scales between the right and left

    Panu Poutvaara, June 2017
    Good-looking political candidates win more votes around the world. This holds for both male and female candidates. Candidate appearance may be especially important for uninformed voters, as it is easy to observe. Voters may favor good-looking candidates because they expect them to be more competent or persuasive, but it can also be that voters simply enjoy laying their eyes on beautiful politicians. As politicians on the right have been deemed more attractive in Europe, the US, and Australia, the importance of beauty in politics favors conservative parties. A related finding is that voters use beauty as a cue for conservatism.
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  • The happiness gap between transition and non-transition countries

    Economic progress coupled with political and institutional stability is needed to reduce unhappiness

    Ekaterina Skoglund, May 2017
    Since 1989, post-communist countries have undergone profound changes in their political, economic, and social structures and institutions. Across a range of development outcomes—in terms of the speed and success of reforms—transition is an “unhappy process.” The “happiness gap,” i.e. the difference in average happiness levels between the populations of transition and non-transition economies, is closing, but at a slower pace than the process of economic convergence. Economic growth, as the determinant of a country’s collective well-being, has been superseded by measurements of institutional quality and social development.
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  • How effective is compulsory schooling as a policy instrument?

    Changes in compulsory schooling laws have significant effects on certain population groups, but are costly to implement

    Colm P. Harmon, March 2017
    Compulsory schooling laws are a common policy tool to achieve greater participation in education, particularly from marginalized groups. Raising the compulsory schooling requirement forces students to remain in school which, on balance, is good for them in terms of labor market outcomes such as earnings. But the usefulness of this approach rests with how the laws affect the distribution of years of schooling, and the wider benefits of the increase in schooling. There is also evidence that such a policy has an intergenerational impact, which can help address persistence in poverty across generations.
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  • Does religiosity explain economic outcomes?

    Understanding religiosity is crucial to informed policy making

    Olga Popova, February 2017
    Most religions in transition economies were marginalized by their former communist regimes. Today, some of these countries are experiencing a revival of religiosity, while others are prone to secularization. Religious norms affect individual decision making with respect to human capital investment, economic reforms, marital stability, employment, and other contexts. This implies that the interests of both religious and non-religious communities may differ and must be taken into account when designing and implementing economic policies, which is a challenge for policymakers.
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  • The economics of mental health

    With modern psychological therapy, mentally ill people can become more productive and more satisfied with life

    Richard Layard, January 2017
    In a typical country, one in five people suffers from a mental illness, the great majority from depression or crippling anxiety. Mental illness accounts for half of all illness up to age 45 in rich countries, making it the most prevalent disease among working-age people; it also accounts for close to half of disability benefits in many countries. Mentally ill people are less likely to be employed and, if employed, more likely to be out sick or working below par. If mentally ill people received treatment so that they had the same employment rate as the rest of the population, total employment would be 4% higher, adding many billions to national output.
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  • Privatizing sick pay: Does it work?

    Employer provision of sickness/disability benefits reduces take-up but may also have unintended effects

    Pierre Koning, December 2016
    Public schemes for sickness benefits and disability insurance are often criticized for the lack of incentive they provide for preventive and reintegration activities by employers. To stimulate the interest of employers in engaging with these schemes, several modes of privatization could be considered, including the provision of sickness benefits by employers, “experience rating” of disability insurance costs, employer self-insurance, or insurance by private insurance providers. These types of employer incentives seem to lower sickness rates, but they also come at the risk of increased under-reporting and less employment opportunities for workers with disabilities or bad health conditions. Policymakers should be aware of this trade-off.
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  • The mortality crisis in transition economies

    Social disruption, acute psychosocial stress, and excessive alcohol consumption raise mortality rates during transition to a market economy

    Giovanni Andrea Cornia, October 2016
    Large and sudden economic and political changes, even if potentially positive, often entail enormous social and health costs. Such transitory costs are generally underestimated or neglected by incumbent governments. The mortality crisis experienced by the former communist countries of Europe—which caused ten million excess deaths from 1990 to 2000—is a good example of how the transition from a low to a high socio-economic level can generate huge social costs if it is not actively, effectively, and equitably managed from a public policy perspective.
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  • Do schooling reforms improve long-term health?

    It is difficult to find consistent evidence that schooling reforms provide health benefits

    David Madden, October 2016
    A statistical association between more education and better health outcomes has long been observed, but in the absence of experimental data researchers have struggled to find a causal effect. Schooling reforms such as raising school leaving age, which have been enacted in many countries, can be viewed as a form of natural experiment and provide a possible method of identifying such an effect. However, the balance of evidence so far is that these reforms have had little impact on long-term health. Thus, policymakers should be cautious before anticipating a health effect when introducing reforms of this nature.
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  • Where do immigrants retire to?

    Immigrants’ retirement decisions can greatly affect health care and social protection costs

    Augustin De Coulon, September 2016
    As migration rates increase across the world, the choice of whether to retire in the host or home country is becoming a key decision for up to 15% of the world’s population, and this proportion is growing rapidly. Large waves of immigrants who re-settled in the second half of the 20th century are now beginning to retire. Although immigrants’ location choice at retirement is an area that has barely been studied, this decision has crucial implications for health care and social protection expenditures, both in host and origin countries.
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