Causal Effects of Morbidity on Labor Supply and Productivity in Turkey

Health is a form of human capital, valued by both employers and employees. Conversely, morbidity is one of the most important factors in individuals’ labor supply decision and the wages s/he commands. Morbidity should reduce individual labor market participation and productivity and individual welfare. Good health is a determinant of economic growth and morbidity adversely affects national economic growth and national well-being. There is beyond anecdotal evidence that health problems not only adversely affect labor market outcomes of the individuals but also significantly reduce their job satisfaction.  Morbidity should reduce participation in the labor force, hours supplied for work and should make individuals less productive.  These are important questions to address in both labor economics and health economics. Therefore, this study will investigate the causal effect of morbidity on labor force participation, labor supply and productivity in Turkey, a developing country. This research will estimate the effect of morbidity on labor force participation decision, hours of work supplied, wages and earnings in Turkey without bias. The analysis will be carried out separately for men and women.