The Economic Cost of Disability, Morbidity and Illness on Labor Market Outcomes in Indonesia

Sophie Mitra, Fordham University
Usha Sambamoorthi, West Virginia University

The purpose of this paper is to use data from the four waves of the Indonesian Family Life Survey to estimate the economic cost of poor health measured by ADL limitations differentiated by severity and length, self reported morbidity, and illness on earnings, labor force participation, and hours worked. Our preliminary findings from FD-OLS specification indicate that the onset of disability - decreases the probability of employment by 2.8 percentage points, decreases the probability of labor force participation by 4 percentage points, and decreases hours worked during the last week by about 1.2 hours. Similar effects are observed between other measures of disability, morbidity, illness and the labor market outcomes.