The AEA is providing open access to all journal content on the AEA website through August 2020 to overcome any difficulties some may have accessing library subscriptions during these challenging times.
The AEA is providing open access to all journal content on the AEA website through August 2020 to overcome any difficulties some may have accessing library subscriptions during these challenging times.
We provide new evidence on households' labor supply responses to fatal and severe non-fatal
health shocks in the short- and medium-run. To identify causal effects, we leverage administrative
data on Danish families and construct counterfactuals using households that experience the
same event a few years apart. Fatal events lead to considerable increases in surviving spouses'
labor supply, which the evidence suggests is driven by families who experience significant income
losses. Non-fatal shocks have no meaningful effects on spousal labor supply, consistent with
their adequate insurance coverage. The results support self-insurance as a driving mechanism
for the family labor supply responses.
