The Effects of Job Loss on Health over Two Decades

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Project Summary Job loss is a negative event that may have detrimental effects on individual health. While there is a large body of literature showing that job loss is associated with poorer health, this body of work is fraught with issues of causality and endogeneity. The proposed study uses a specific and unique case of job loss in China to extend the literature on causal effects of job loss on health – government-driven layoffs in state-owned enterprises (SOEs) in China. Because the SOE layoffs are mostly induced by exogenous policy change, and not dictated by personal performance or market competitions, this case provides a more exogenous case than general layoffs in examining the causal effect. We will employ two datasets that complement each other – a longitudinal dataset that spans over two decades (China Health and Nutrition Survey (CHNS) 1993-2015), and a recent dataset with a retrospective life history survey (China Health, Retirement Longitudinal Study (CHARLS) 2011-2018) for analysis. This project is significant in that it improves our understanding of the short- and long-term effects of job loss on health, the mechanisms of this relationship, and how such effects differ by gender, family contexts, occupation prestige, and education levels of individuals. Additionally, it will identify the career stages and economic contexts that further victimize job losers. By identifying the individuals who are the hardest hit by job loss, the study will help policy makers effectively cushion the adverse effect of job loss on health in the future. This is especially important in contemporary societies where job stability has been declining. We will also be among the first to examine the long-term effect of job loss on dementia among older adults.