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Working Paper No. 1326

CEO Health

Working Paper
Keloharju, Matti, Samuli Knüpfer and Joacim Tåg (2020). “CEO Health”. IFN Working Paper No. 1326. Stockholm: Research Institute of Industrial Economics (IFN).

Matti Keloharju, Samuli Knüpfer, Joacim Tåg

Using comprehensive data on 28 cohorts in Sweden, we analyze CEO health and its determinants and outcomes. We find CEOs are in much better health than the population and on par with other high-skill professionals. These results apply in particular to mental health and to CEOs of larger companies. We explore three channels that can account for CEOs’ robust health. First, we find health predicts appointment to a CEO position. Second, the CEO position has no discernible impact on the health of its holder. Third, poor health is associated with greater CEO turnover. Here, both contemporaneous health and health at the time of appointment matter. Poor CEO health also predicts poor firm outcomes: we find a statistically significant association between mental health and corporate performance. This result can be traced to smaller-firm CEOs, for whom a one standard deviation deterioration in mental health translates into a performance reduction of 6% relative to the mean.