Stay healthy – will the rest follow? The impact of health on wages in Russia

Abstract

In this article, we analyze the impact of health on wages in Russia in 2012–2019, using the data from the RLMS-HSE survey. As a measure of health impact we consider hour wages. Health is estimated by means of self-assessed health data. We use a Minсer-type wage equation. To take into account self-selection, we use the Heckman procedure to deal with the unobservable heterogeneity; we employ the panel structure of the RLMS-HSE data. The impact of health on hour wages in Russia is significant, but not great: good and very good health corresponds to an increase in earnings of 2–5% compared to average health for men and 1–3% for women. Bad health significantly reduces wages, but when self-selection is taken into account, its effect becomes insignificant. The impact of health on wages is markedly increased for groups with a low level of education, which, in our opinion, may indicate a greater importance of health for unskilled and physical labor. The robustness of our results was tested using an alternative data source.