The Impact of Income Shocks on Health: Evidence from Cohort Data
AbstractWe study the effect of permanent income innovations on health for a prime-aged population. Using information on more than half a million individuals sampled over a 25-year period in three different cross-sectional surveys we aggregate data by date-of-birth cohort to construct a "synthetic cohort" data set with details of income, expenditure, socio-demographic factors, health outcomes, and selected risk factors. We then exploit structural and arguably exogenous changes in cohort incomes over the 1980s and 1990s to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effect on a wide range of health measures, but do lead to increases in mortality and risky health behaviour. (JEL: I10, D31) (c) 2009 by the European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 7 (2009)
Issue (Month): 6 (December)
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Web page: http://www.mitpressjournals.org/jeea
Other versions of this item:
- Jérome Adda & James Banks & Hans-Martin von Gaudecker, 2007. "The Impact of Income Shocks on Health: Evidence from Cohort Data," MEA discussion paper series 07146, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Adda, Jérôme & Banks, James & Gaudecker, Hans-Martin von, 2008. "The Impact of Income Shocks on Health: Evidence from Cohort Data," IZA Discussion Papers 3329, Institute for the Study of Labor (IZA).
- Jerome Adda & James Banks & Hans-Martin von Gaudecker, 2007. "The impact of income shocks on health: evidence from cohort data," IFS Working Papers W07/05, Institute for Fiscal Studies.
- I10 - Health, Education, and Welfare - - Health - - - General
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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