Our analysis is based on the 2008 Athens Area Study and exploits detailed information regarding health impairments and labor market outcomes for Greek males. Distinguishing between healthy and heath-impaired employees who have or do not have work limitations, the unobserved productivity effect of health is separated from discrimination. We then estimate a regression model that includes terms to correct the employment selection and endogenous stratification on self-reported health condition. A penalty for productivity limitation exists. Evidence of wage discrimination is also found. Both findings are statistically significant and highlight the necessity of instituting active policies against unequal treatment.
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