Health status impacts on individual earnings in Brazil

The aim of this paper is to estimate the impact of health conditions on the earnings of Brazilians. We have identified three ways through which health conditions affect workers’ earnings: labor force participation, hourly wages and weekly hours worked. A measure of the welfare reduction due to poor health conditions was created by aggregating individual losses. Individuals are classified as sick or healthy according to two criteria. Firstly, the clinical criterion which is based on the presence of chronic diseases or problems with physical mobility. Secondly, the subjective criterion which is based on the health self-assessment. Each Brazilian individual loses from R$6.30 to R$16.89 per week depending on individual characteristics. In relative terms these aggregated losses represent from 1.5% to 4.7% of the Brazilian GDP. The data base used in this work were PNAD/1998 (the Brazilian national household survey). In 1998, PNAD had an additional survey about health.