The impact of health on the employment and earnings of young South Africans

22 April 2016
Publication Type: Working Paper
JEL Code: I15, J21, J31, O12

This paper estimates the impact of health on employment and earnings among individuals aged 15-39 years in South Africa.  Though one of the richest countries in Africa, South Africa is plagued by substantial disease burden especially from communicable diseases, injuries, maternal and child mortality, and non-communicable diseases. The country also has very high unemployment rates, with the unemployment rate among those aged 15-24 years exceeding 50% in 2014 (according to the International Labour Organization definition). The National Income Dynamics Study, a nationally representative panel survey of South African individuals and households, is used for the analysis. Using the second and third data waves (collected in 2010 and 2012 respectively) and controlling for genetic unobserved heterogeneity using sibling fixed effects, we find robust negative and statistically significant impact of adverse health status on employment and wages. These findings indicate that ill health is an added hindrance to young South Africans’ employment and earnings, and is therefore likely to worsen poverty. Health policy can be a tool for improving the employment and earnings of young South Africans.

Working paper 601
1 April 2016