Job displacement and the health of older adults: Evidence from China
By Xiaoyun Zhang & Yiyang Luo
This paper investigates the long-term consequences of involuntary job displacement on multidimensional health outcomes among middle-aged and older adults in urban China, using the 2014 China Health and Retirement Longitudinal Survey (CHARLS) Life History Questionnaire. To address the endogeneity of job loss, we exploit business closures, position cancellations, and layoffs during the state-owned enterprises (SOEs) reforms in the late 1990s as exogenous labor market shocks and employ Propensity Score Matching (PSM) to control for childhood socioeconomic conditions and family health history. The results show that the overall health of displaced workers has deteriorated in the long run, particularly in terms of mental well-being and cognitive functioning. The adverse effects are more pronounced among males, younger cohorts, and highly educated individuals. Further analysis suggests that these effects operate through increased financial constraints, reduced healthcare utilization, and disrupted social integration.
Source SSRN
