Labour Market Discrimination on the Basis of Health: An Application to UK Data

Abstract

This paper carries out an analysis of wage discrimination on the basis of health on UK data with a number of important modifications. First we control for selection into health status. Second the direct effect of health upon productivity is accounted for and third, we examine discrimination with regard to participation as well as wages. The question of selection into health status is found to be of little empirical importance but taking account of the direct impact of health upon productivity leads to a fall in measured discrimination. The paper finds similar results with regard to participation. We also examine whether these effects differ across age and also test for the statistical significance of discrimination.