In the first part of the dissertation, I estimate the effect of a married adult's specific health condition on his or her own labor market decisions (labor force participation, earnings, hourly wages, and hours of work) and his or her spouse's. I focus on cancer, stroke, ischemic heart disease, emphysema, chronic bronchitis, chronic obstructive pulmonary disease (COPD) and asthma. The effects differ by health condition and duration of the disease. Among married men who are working, having had emphysema for less than one year is enough to reduce the earnings of a man with college degree to those of a healthy man without high school diploma. My results also suggest that if a man has had cancer, his wife may have to compensate for the ensuing loss in household income by working more hours or entering the labor force.

In the second part of the dissertation, I focus on the effect of children's asthma on mothers' labor force participation, on fathers' and mothers' labor supply, and on their hourly wages and weekly earnings. I compare these effects to those of a set of health conditions that includes deformities, congenital anomalies, heart problems, epilepsy and cancer. I find that single mothers with chronically ill children are the most affected group in terms of hours of work lost and reduction in earnings, and that fathers with an asthmatic child less than six years old work more hours per week. Then, I explore how mothers' labor force participation and hours of work affect days missed from school of a chronically ill child. I find that maternal employment is associated with a higher probability of a child missing school, and that this effect is the same for healthy children as for asthmatic children. In contrast, I find that if the mother works, then a child with deformities, congenital anomalies, heart problems, epilepsy or cancer is less likely to experience lost school days than if the mother does not work.

I estimate the magnitude of these effects using data from the Medical Expenditure Panel Survey for U.S. households from 1996 to 2002.