Publication Date



Upjohn Institute working paper ; 18-290




Health, human capital, and labor market outcomes are linked though complex connections that are not fully understood. We explore these links by estimating a flexible yet tractable dynamic model of human capital accumulation in the presence of health shocks using administrative data from Chile. We find that (i) human capital mitigates the negative labor market effects of health events, (ii) these alleviating effects operate through channels involving occupational choice, the frequency of exposure to health events, and access to health care, and (iii) the effect of health shocks on labor market outcomes is heterogeneous across industries and types of diagnoses.

Issue Date

June 2018

Subject Areas

LABOR MARKET ISSUES; Job security and unemployment dynamics; Wages, health insurance and other benefits


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Parro, Francisco and R. Vincent Pohl. 2018. "Health Shocks, Human Capital, and Labor Market Outcomes." Upjohn Institute Working Paper 18-290. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.