The labor market consequences of race differences in health

Abstract

This article examines whether race and ethnicity disparities in health account for similar disparities in employment status and other labor-related outcomes. Using white Americans as a reference, two population groups whose health is systematically worse than that of whites (blacks and Native Americans) are identified. Then the distribution of labor-related outcomes - employment status, earnings, participation in public transfer programs, and household income - is documented for these groups. Finally, how much these differences in health status account for differences in the groups' labor-related outcomes is examined. Health disparities seem to contribute to the substantial difference in employment and participation in public transfer programs between whites and blacks and between whites and Native Americans. But health disparities account for a smaller portion of the substantial differences in household income and labor earnings across racial/ethnic groups.