Health and work in the family: Evidence from spouses' cancer diagnoses.
Using Canadian administrative data from multiple sources, we provide the first nationally representative estimates for the effect of spouses' cancer diagnoses on individuals' employment and earnings and on family income. Our identification strategy exploits unexpected health shocks and combines matching with individual fixed effects in a generalized difference-in-differences framework to control for observable and unobservable heterogeneity. While the effect of spousal health shocks on labor supply is theoretically ambiguous, we find strong evidence for a decline in employment and earnings of individuals whose spouses are diagnosed with cancer. We interpret this result as individuals reducing their labor supply to provide care to their sick spouses and to enjoy joint leisure. Family income substantially declines after spouses' cancer diagnoses, suggesting that the financial consequences of such health shocks are considerable.
Statistics Canada, Social Analysis and Modelling Division, R.H. Coats Building, Ottawa, ON K1A 0T6, Canada. Electronic address: sung-hee.jeon@canada.ca.
Sung-Hee
SH
Jeon
University of Georgia, Terry College of Business, Department of Economics, 310 Herty Dr, Athens, GA 30602, USA. Electronic address: pohl@uga.edu.
R Vincent
RV
Pohl
D000328:Adult; D000367:Age Factors; D002170:Canada; D004651:Employment / Q000191:economics / Q000706:statistics & numerical data; D005190:Family; D005260:Female; D006801:Humans; D007182:Income / Q000706:statistics & numerical data; D008297:Male; D008875:Middle Aged; D009369:Neoplasms / Q000191:economics*; D012737:Sex Factors; D018454:Spouses
Health shocks; Spousal cancer diagnosis; Spousal earnings; Spousal employment