More than mirror images: Health associations of transitions between formal and informal employment.

Informal employment is an important social determinant of health, yet little is known about whether transitions into and out of informal employment are associated with health in similar ways. Using nationally representative panel data from the China Family Panel Studies from 2014 to 2020, this study examines whether transitions from formal to informal employment and from informal to formal employment are differently associated with self-rated health among non-agricultural workers in China. Asymmetric fixed-effects models show that transitioning from formal to informal employment is associated with a 0.078-point decline in self-rated health on a five-point scale, equivalent to approximately 0.07 standard deviations. The corresponding estimate for exit from informal employment is smaller and not statistically significant. Event-study analyses indicate that the entry-related health decline becomes apparent around the observed transition interval and is not preceded by differential health deterioration. The entry-related health decline amounts to approximately 0.16 standard deviations among workers over age 45 and 0.08 standard deviations among workers with a high school education or less, whereas the corresponding entry estimates are not statistically significant among younger and more-educated workers. These findings suggest that the direction of labor-market transition matters for health and highlight the importance of reducing avoidable movement into informal employment and extending social protection across employment forms.