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KMID : 1170320150210030103
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Korean Journal of Health Economics and Policy
2015 Volume.21 No. 3 p.103 ~ p.121
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The impacts of health status on the productivity and wage level
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Jeong Won-Il
Jeon Yong-Il
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Abstract
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We investigate how the health status of individual workers has impacted on their wage and corresponding productivity. By estimating the Mincer’s wage equation, we find that healthier workers are paid with higher wages and that the wage ga[ of elderly workers get widened according to their poor health conditions. Then, we conjecture the difference either due to their productivity or to the distinctive discrimination element in the framework of Oaxaca-Blinder decomposition. Workers`` subjective perception on their health conditions causes the 75~80% of wage gap, where their objective perception explains the difference up to the 90% of the total wage differential. In addition, elderly workers over 50 years old produce the significant level of disparities between their health conditions and productivity. Our empirical results imply that the lack of healthiness brings the decline in workers`` productivity, leading to their low wage level. Thus, individual workers need to manage their health wisely in the sense of managing human capital properly, possibly led by suitable government health policies.
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KEYWORD
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health level, labor productivity, wage difference, wage discrimination
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