Journal of Community & Applied Social Psychology

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Volume 6 Issue 3 (August 1996), Pages fmi-fmi, 157-231

Unemployment and Health: Selection Effects (pages 189-205)

Abstract

A large number of studies have shown that the unemployed are less healthy, both physically and psychologically, than the employed. The explanation may be that unemployment has negative health effects. An alternative, or additional, explanation is that healthy persons are less likely to become unemployed or more likely to find new employment if they become unemployed. Such effects of health on employment status are generally referred to as selection effects. The present paper analyses to what extent such selection effects are present in the Norwegian labour market. Panel data with observations made in 1989 and 1993 are used. The analyses show that people with psychological problems are more likely to be laid off, and there is also some evidence that psychological or physical health problems may reduce the chances of finding a new job if one has become unemployed. It is of particular interest that these selection effects can be documented for a country like Norway, which has strong legislation supporting worker rights and a quite high degree of unionization.

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