Health and Cognition at Work: Labor Market Performance of Males and Females in a Low Income Setting

Daniel R. LaFave, Colby College
Duncan Thomas, Duke University

A large literature documents that taller individuals are more successful in the labor market, particularly in lower income settings. Potential explanations for this premium include stature is a marker of strength; height is a proxy for cognition or other dimensions of health and human capital; and height serves as a signal of worker quality to employers. This paper evaluates the relative importance of each mechanism in a unified framework drawing on 15 waves of an extremely rich large-scale longitudinal survey collected in Central Java, Indonesia. The survey, which was explicitly designed to address this question, includes, for each respondent, an extensive set of health biomarkers, multiple measures of cognition, some of which are repeated, and extremely rich information on labor market outcomes including sectoral choice, type of work, hours, tenure, earnings and wages. The research provides evidence on the complex inter-linkages between human capital and labor market performance.