Labor Displacement and Health: Investigating Alternative Causal Pathways

Kate W. Strully, New York University

There is significant evidence documenting a positive association between labor displacement and poor health. However, the relative importance of alternative causal pathways behind this relationship remains unclear. Displacement may increase the risk of poor health; however, poor health may also make it difficult to keep a job. In this paper, I use multiple analytic strategies and both random effects and individual-level fixed effects models in an effort to untangle these issues. Emphasizing displacements that result from companies going out of business, relocating, or closing plants, I consider how job loss that is independent of baseline health status influences later health status. Estimating the consequences of labor displacement within occupational categories, I further consider how job loss influences health, net of selection into varying occupations. Preliminary results suggest that, while health-based selection may upwardly bias estimates, displacement has health consequences, net of selection.