similar to [8]. They propose explanations based on deferred compensation, match-specific productivity in presence of search frictions, personnel networks within the firm.

**Returns to Health Investments.** Individual health status is an important component of human capital but it is more difficult to measure at the micro level than schooling or labor market experience. This section reviews some of the variables that have been used in the literature to proxy individual health and discusses their estimated returns.

An important component of individual health which is frequently collected in household surveys is _disability status_ . Disability is typically defined as "a physical, mental, or other health condition that limits the kind or amount of work" an individual can perform.<sup>19</sup> Gilleskie and Hoffman (2014) use this measure to estimate the impact of health capital on wages. To reduce endogeneity, they develop a model of joint health and labor market decisions. Their estimates on U.S. data show that the direct effect of moderate disability on wages is significant but relatively small (about $0.30 per hour).<sup>20</sup> However, they find strong impacts on labor market transitions: moderately disabled workers are 23% more likely to make an occupation or employment transition than nondisabled workers. Since the returns to these transitions are estimated to be lower for individuals affected by disability and since the disability induces more of them, the overall impact of disability accrues over time, generating much larger impact on wages in the medium-long run. Campolieti and Krashinsky (2006) use Canadian data to study the impact of accidents on the job. They similarly show the important interaction between disability and job mobility. Their estimates suggest larger wage losses for disabled workers who did not return to work with their time-of-accident employer than for those who did return, with the latter earning 27% more.

Another component related to health status that is receiving increasing attention is _body mass_ . Thomas and Strauss (1997) is one of the first contribution studying the impact of health on wages in Brazil. They estimate a significant association between Body Mass Index (BMI) and wages of males, in particular among the less-educated. Harris (2014) estimates the full labor market impact of BMI by allowing long-run effects to take place. He uses a life-cycle model similar to Gilleskie and Hoffman (2014) estimating that a reduction in an individual's initial body mass by 10% leads to a 4% increase in wages after age 30. Brunello et al. (2009) focus on obesity confirming the significant negative correlation between obesity and wages in a review of a large number of European countries.

Finally, _stunting_ is an important marker of health and cognitive status for children. A child is affected by stunting when she is being excessively short for her age (2 standard deviations below the median of a healthy reference population). The review presented by Hoddinott et al. (2013a) looks at the impact of stunting in the 1000 days after conception throughout the life cycle. Using a range of estimates for a variety of countries, they conclude that the prevention of one fifth of stunting would increase income by 11%. Victora et al. (2008) use a long cohort study on Brazil estimating that a one standard

> 19 This is the definition used by one of the most important survey used in the U.S. literature, the Survey of Income and Program Participation (SIPP) conducted by the United States Census Bureau. 20 They use the 1996 SIPP which covers individuals up to the year 2000.

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