Wealth for Health?

Abstract

We study the impact of mortality risk at the workplace on mortality differentials. To this purpose we build a life-cycle search and matching model with wealth accumulation where on-the-job mortality risk is bargained between workers and firms. Our quantitative analysis shows that wealthy individuals optimally choose lower mortality risk. Getting wealthy, however, either requires higher risk-taking in the early career or a favorable labor market history. We document that mortality differentials increase over the life-cycle as a result of diverging labor market histories that create heterogeneous incentives for risk-taking.