A systematic review and meta-analysis on the effects of health shocks on labour supply

Abstract

Abstract Background The relationship between health and labour has received considerable attention. There have been several studies exploring the link between health shocks and labour supply. However, there are only few systematic reviews and meta-analyses in this area. The current work aims to fill the gap by undertaking a systematic review and meta-analysis on the effects of health shocks and labour supply. Purpose The purpose of this work is to conduct a systematic review and meta-analysis in order to produce pooled estimates of the effects of health shocks on labour supply. This provides two main contributions to the literature. First, it offers a comprehensive systematic review on the relationship between health and labour supply, an area of research where systematic reviews are uncommon. Second, it goes beyond a standard qualitative synthesis by performing a meta-analysis to quantify the combined effects of health shocks on labour supply. This might offer policy makers more accurate and credible evidence as pooled effects have the advantage of being based on larger sample sizes. Methods We conduct a thorough search using the databases EconLit and Medline together with grey literature to identify relevant papers for the analysis. We check results of these papers and extract the necessary information following an extraction tool. We calculate partial correlations to determine effect sizes and estimate the overall effect sizes by using the random effects model captioned in forest plots. Sub-group analyses are conducted based on geography, publication year and model type to assess the sources of heterogeneity. We also employ multivariate and univariate meta regressions to further examine the sources of heterogeneity. Moreover, we test for publication bias by using a funnel plot, the Egger’s test, the Begg’s test and the trim and fill methodology. Results We find a negative and statistically significant pooled estimate of the effect of health shocks on labour supply. The studies exhibited substantial heterogeneity with the I2 test showing 96.6 percent. Sub-group analysis and univariate meta regressions showed that sample size, geography, model type and publication year were significant sources of heterogeneity. The funnel plot and the Egger’s test showed some level of publication bias, but this was contrasted by both the Begg’s test and the trim and fill methodology. Conclusion We undertook a systematic review and meta-analysis on the effects of health shocks on labour supply. We searched the Econ Lit and Medline databases together with grey literature. Using partial correlations, we estimated the overall effect size by employing a random effects model and found a negative pooled effect of health shocks on labour supply. Sub-group analyses along with meta regressions were undertaken to deal with the observed high heterogeneity among studies and we established that geography, sample size, model type and publication year are significant sources of heterogeneity. Our results are novel in that this is the first meta-analysis on the topic directly filling the gap regarding understanding of pooled effects of health shocks on labour supply. The study is relevant for the understanding of policies regarding social protection, disability allowance and other relevant policies emanating from the health -labour relationship.