The impact of diabetes on labour market outcomes

Abstract

This study estimates the effect of diabetes on labour market outcomes (employment, unemployment and labour force participation) in South Africa using data from the South African General Household Survey (2018). We first examine the possibility that diabetes status is endogenous through the application of heteroscedasticity-based instruments. Internal instruments meet the underlying diagnostic expectations, but do not consistently accept the endogeneity hypothesis. Thus we turn to multinomial logit models, ignoring endogeneity, to estimate the effect of diabetes. Our findings indicate that diabetes has differential effects for men and women, where the magnitude of the effect tends to be larger (in absolute value) for women.