Health shocks and labour market outcomes: evidence from The Irish Longitudinal Study on Ageing (TILDA)

Population ageing and later pension ages make older adults' ability to work after adverse health events a key policy issue, yet causal evidence for Ireland is scarce. We use the Irish Longitudinal Study on Ageing (TILDA) to estimate the causal impact of unanticipated health shocks on labour-market outcomes during the post-crisis period 2009-2018.

The sample includes 1,885 individuals aged 50-65 who were in paid work at baseline and observed for up to four biennial waves (4,160 year-to-person observations). Health shocks are analysed and defined as: (i) recent hospitalisation and (ii) first diagnosis of a chronic condition. To address selection into health events we apply inverse probability weighting with regression adjustment (IPWRA), which is doubly robust to misspecification of either the treatment or outcome model. This paper further discusses the role of public healthcare entitlements (GP/Medical card holder) as an important institutional dimension. Heterogeneity is explored by demographics and socioeconomic status. Various employment and health outcomes are examined.

A new chronic condition lowers the probability of remaining employed in the following wave by 3.0 percentage points (≈ 16% increase in the exit rate); hospitalisation reduces annual wages by 3,600 euros but shows no significant effect on hours worked. Both shocks predict deteriorating health conditions and higher healthcare utilisation. Employment effects are larger for women, low-SES respondents, and individuals outside the Dublin region. Possession of a public health entitlement raises the short-term risk of job exit yet, conditional on staying employed, appears to protect working capacity.

For Irish older workers in the 2010s, acute health shocks reduced labour supply weakly on average, but the burden is concentrated among socio-economically disadvantaged groups. Universal access to subsidised primary care appears to cushion employment losses. Policies that expand early access to public health entitlements could therefore support longer working lives without exacerbating inequality.