Working conditions and the relationship between schooling and health

This paper's main objective is to investigate an occupational linkage in the empirically observed positive relationship between schooling and health. Combining results from the health economics literature and labor economic studies of occupational choice, a theoretical model is developed which allows schooling to affect health directly and indirectly, through choice of work environment and other market inputs in health production. The model is estimated using data from the 1980 Health Interview Survey, combined with occupational information from the Dictionary of Occupational Titles. The empirical results indicate the existence of a small occupation effect in the schooling-health relationship, but this effect is conservatively estimated and biased downward given the presence of unobserved differences in individuals' initial health status. The general findings highlight the importance of investigating the health effects of occupational hazards using longitudinal data and comprehensive measures of hazards which include stress at work.