Family Labor Supply Responses to Severe Health Shocks: Evidence from Danish Administrative Records
American Economic Journal: Applied Economics
vol. 13,
no. 3, July 2021
(pp. 1-30)
Abstract
We provide new evidence on households' labor supply responses to fatal and severe nonfatal health shocks in the short run and medium run. To identify causal effects, we leverage administrative data on Danish families and construct counterfactuals using households that experience the same event a few years apart. Fatal events lead to considerable increases in surviving spouses' labor supply, which the evidence suggests is driven by families who experience significant income losses. Nonfatal shocks have no meaningful effects on spousal labor supply, consistent with their adequate insurance coverage. The results support self-insurance as a driving mechanism for the family labor supply responses.Citation
Fadlon, Itzik, and Torben Heien Nielsen. 2021. "Family Labor Supply Responses to Severe Health Shocks: Evidence from Danish Administrative Records." American Economic Journal: Applied Economics, 13 (3): 1-30. DOI: 10.1257/app.20170604Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D15 Intertemporal Household Choice; Life Cycle Models and Saving
- G22 Insurance; Insurance Companies; Actuarial Studies
- I12 Health Behavior
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- J22 Time Allocation and Labor Supply
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