Our analysis is based on the 2008 Athens Area Study and exploits detailed information regarding health impairments and labour
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 for employment selection and endogenous stratification of 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 for instituting active policies against unequal treatment.
Keywords Ill-health - Wage discrimination - Labour market participation - Selection model - Endogenous switching model
JEL Classification I1 - J2 - J3