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August 24, 2018STUDY: IN SICKNESS AND IN HEALTH: THE ASSOCIATION BETWEEN HEALTH AND HOUSEHOLD INCOME Statistics Canada recently released the study “In sickness and in health: The association between health and household income.” This study examines the correlation between health and elements of labour, including labour income, probability of working, hours worked, and hourly wages, for individual’s own and spousal health. Note that the results of this study do not imply causal relationships between health and income, for individuals or spouses.
Data come from the Longitudinal and International Study of Adults (LISA) from 2014, which is also linked to administrative tax data. The study collects information on self-reported general and mental health, employment outcomes, and other individual characteristics. In addition to individual income, the combined income of both partners (the sum of both partner’s before-tax labour market income) is used in this study. The vast majority of couples in this dataset are of the opposite sex.
There is a strong correlation between both general and mental health and labour market income, for both men and women, such that those reporting fair or poor health outcomes tend to have lower combined and individual income. To examine this, a statistical model is used which assumes that the change in an individual’s labour market income resulting from a change in health (for the individual or their spouse) can be decomposed into three effects:
- The employment effect that results from a change in the probability of employment from a change in health
- The hours worked effect that results from a change in the average number of hours worked from a change in health, conditional on working
- The wage effect that results from a change in the hourly wage from a change in health, conditional on working
This study only measures the association between health and income as there have only been two waves of the LISA. With limited data, estimating the causal effect that a change in health status has on income is difficult. Subsequent waves of this survey will make it possible to measure the causal effect of a change in health on income.
Controlling for other individual and household characteristics, results show that male individuals who reported poorer general or mental health also tended to report lower combined income – almost all of which could be explained by lower individual income from the male who reported the poorer health condition. Men who reported fair or poor general health were less likely to be employed (-19.7 percentage points) than men who reported good to excellent health. For mental health outcomes, men were both less likely to be employed (-10.3 percentage points) and likely to earn a lower hourly wage ($2.7 per hour lower) when reporting fair or poor mental health.
Female individuals who reported poorer health also tended to report lower combined income, where about half of which could be explained by lower individual income from the female who reported the poorer health condition. This implies that their partners also experienced reduced income when women reported poor general health. Women with fair or poor general health were less likely to be employed (-22.1 percentage points) and worked fewer hours per week (-3.1 hours) than women who reported good to excellent general health. In contrast, women who reported poorer mental health also reported lower combined income – almost all of which could be explained by their own income being lower. Women who reported poor mental health were less likely to be employed (-13.5 percentage points) compared to those who reported better mental health.
For men, poor spousal health was associated with lower combined income, about half of which was related to the male individual having lower earnings. Male partners tended to earn about $5 less an hour when their spouse reported fair or poor general health outcomes. For women, there was very little association between women’s labour market outcomes and their spouse’s health.
These results imply that a spouse’s health may affect men differently than it affects women. When women report poorer health outcomes, their partners tend to report lower income. In contrast, women’s income does not seem to be correlated with the health outcomes of their partners.
Daily Release | Full Report
This article is part of the Longitudinal and International Study of Adults Research Paper Series (89-648-X)
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