Health shocks, health and labor market dynamics, and the socioeconomic-health gradient in older Singaporeans

Abstract

Health disparities by socioeconomic status (SES) are potentially shaped by how an individual's health status and work capacity are affected by the incidence of illness, and how these effects vary across SES groups. We examine the impact of illness on the dynamics of health status, work activity and income in older Singaporeans to gain new insights on how ill health shapes the socioeconomic health gradient. Our data comprise of 60 monthly waves (2015-2019) of panel survey data containing 445,464 person-observations from 11,827 unique respondents from Singapore. We apply a matched event-study difference-in-differences research design to track how older adults' health and work changes following the diagnosis of heart disease and cancer. Our focus is how the dynamics of health and work differ for different SES groups, which we measure by post-secondary education attainment. We find that the dynamics of how self-assessed health recovers following the diagnosis of a new heart disease or cancer do not vary significantly across SES groups. Work activity however varies significantly, with less well-educated males and females being significantly less likely to be in active employment and have income from work, and are marginally more likely to be in retirement following the onset of ill health. By contrast, more well-educated males work more, and earn more a year after the health shock than they did before they fell ill. Occupational differences likely played a role in how work activity of less well-educated men decline more after an acute health event compared with more well-educated men. Understanding the drivers of the socioeconomic health gradient necessitates a focus on individual-level factors, as well as system-level influences, that affect health and work.

Keywords: Health and socioeconomic gradient; Health shocks; Labor market dynamics; Monthly panel data; Singapore.