Estimating Causal Effects of Early Occupation on Later Health: Evidence Using the PSID

Jason Fletcher, Yale University
Jody Sindelar, Yale University

Using the panel structure and retrospective occupational histories available in the Panel Study of Income Dynamics (PSID), we examine whether early occupation has lasting effects on health status as individuals age. We merge historical Census data that reflect the labor market conditions when individuals in the PSID made their first occupational choices. We use these data on labor market conditions (e.g. percentage blue collar workers in the labor market in the state when entering the labor market) and father’s occupation as instruments to address endogeneity bias in our baseline results. Importantly, we control for respondent’s pre-labor market health and education and both mother’s and father’s education. We find substantial evidence that choosing blue collar occupations at labor force entry harms later health. These health effects are larger after controlling for endogeneity. We also find differences in the effects of occupation by gender, race and age.