EXECUTIVE SUMMARY
This dissertation is composed of three essays which examine the effects of health
on labor market outcomes.1 Chapter 1 reviews the literature on health and the labor
market. It also emphasizes the inherent endogeneity of health when included in models
for labor market outcomes. It goes on to highlight the empirical methods most often used
to accommodate that endogeneity. Chapter 2 explores three hypotheses concerning the
role of health status in an individual’s decision to transition into self-employment. It
goes beyond the well-documented “job-lock” phenomenon which emphasizes the role of
health as a factor in the demand for employer sponsored health insurance (“ESI”) which
may be a potential barrier to employment transitions. Chapter 3 examines the extent to
which a spouse’s ill-health influences the labor supply decisions of older men and
women. Although contextually different from models of own-health and own labor
supply, similar concerns regarding the possible endogeneity of health measures discussed
in Chapter 1 still arise when dealing with a spouse’s health in models for own labor
supply decisions.
Chapter 1 discusses the endogenous nature of health in models of labor market
decisions by individuals. Grossman (1972; 1999) and Michael (1973) expand the human
capital theory approach to the treatment of health in labor models to treat health as both a