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The tax-free year in Iceland: A natural experiment to explore the impact of a short-term increase in labor supply on the risk of heart attacks

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  • Ólafsdóttir, Thorhildur
  • Hrafnkelsson, Birgir
  • Thorgeirsson, Gudmundur
  • Ásgeirsdóttir, Tinna Laufey

Abstract

Evidence is mixed on whether society-wide economic conditions affect cardiovascular health and the reasons for the suggested relationship are largely untested. We explore whether a short-term increase in labor supply affects the probability of acute myocardial infarctions, using a natural experiment in Iceland. In 1987 personal income taxes were temporarily reduced to zero, resulting in an overall increase in labor supply. We merge and analyze individual-level, registry-based data on earnings and AMIs including all Icelandic men and women aged 45–74 during the period 1982–1992. The results support the prominent hypothesis of increased work as a mechanism explaining worsening heart health in upswings, for men aged 45–64 who were self-employed. We furthermore find a larger increase in probability of AMIs during the tax-free year in men aged 45–54 than men aged 55–64.

Suggested Citation

  • Ólafsdóttir, Thorhildur & Hrafnkelsson, Birgir & Thorgeirsson, Gudmundur & Ásgeirsdóttir, Tinna Laufey, 2016. "The tax-free year in Iceland: A natural experiment to explore the impact of a short-term increase in labor supply on the risk of heart attacks," Journal of Health Economics, Elsevier, vol. 49(C), pages 14-27.
    • Handle: RePEc:eee:jhecon:v:49:y:2016:i:c:p:14-27
    DOI: 10.1016/j.jhealeco.2016.06.006
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    Cited by:

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    3. Kristín Helga Birgisdóttir & Tinna Laufey Ásgeirsdóttir, 2017. "Macroeconomic conditions and population health in Iceland," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 37(25), pages 769-852.
    4. Giri, Jeeten Krishna & Kumaresan, Talitha, 2021. "The business cycle, health behavior, and chronic disease: A study over Three decades," Economics & Human Biology, Elsevier, vol. 43(C).

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    More about this item

    Keywords

    Coronary heart disease; Acute myocardial infarction; Labor supply; Natural experiment; Iceland;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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