Essays on Macroeconomics and Health

Abstract: This thesis consists of four independent papers covering macroeconomic topics such as unemployment insurance, retirement, business cycles and disability insurance. The unifying theme connecting all papers is the importance of health when addressing these issues. The first paper derives the optimal insurance against unemployment and disability in a setting where individuals can determine the probability of becoming disabled by exerting prevention effort. The second paper develops a life cycle model of labor supply and retirement to study the interactions between health and the labor supply behavior of older workers, in particular disability insurance and retirement. The third paper looks at the role of health in a business cycle framework. Here, health is treated as an asset that generates time and utility. The last paper derives a theoretical model of the application decision for disability benefits and proposes an empirical strategy for measuring screening stringency in the disability insurance program.