I am running regressions to estimate the impact of health conditions on life satisfaction.
I have read a paper that showed that there is likely to be measurement error in the self-reported health variables in that those who do not work are more likely to report health problems to justify not working.
My question is, is this a problem for my estimates? I include various dummy controls to capture employment status so do I simply control for this potentially problematic bias due to measurement error?
Or, is the bias still there in which case I guess it would be a downward bias? Does my use of panel data and fixed effects make any difference?