Handling the endogeneity of income to health using a field experiment in Taiwan
AbstractThis paper uses an exogenous increase in income for a specific sub-group in Taiwan to explore the extent to which higher income leads to higher levels of health and wellbeing. In 1995, the Taiwanese government implemented the Senior Farmer Welfare Benefit Interim Regulation (SFWBIR) which was a pure cash injection, approximately US$110 (£70) per month in 1996, to senior farmers. A Difference-in-differences (DiD) approach is used on survey data from the Taiwanese Health and Living Status of Elderly in 1989 and 1996 to evaluate the short term effect of the SFWBIR on self-assessed health, depression, and life satisfaction. Senior manufacturing workers are employed as a comparison group for the senior farmers in the natural experiment because their demographic backgrounds are similar. This paper provides evidence that the increase in income from the SFWBIR significantly improved the mental health of senior farmers by reducing the scale of depression (CES-D) by 1.718, however, it had no significant short term impact on self-assessed health or life satisfaction.
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Bibliographic InfoPaper provided by Economic Studies, University of Dundee in its series Dundee Discussion Papers in Economics with number 263.
Length: 23 pages
Date of creation: Feb 2012
Date of revision:
social welfare benefit; life satisfaction; mental health; natural experiment; difference-in-differences;
Other versions of this item:
- Tseng, Fu-Min & Petrie, Dennis, 2012. "Handling the endogeneity of income to health using a field experiment in Taiwan," SIRE Discussion Papers 2012-01, Scottish Institute for Research in Economics (SIRE).
- I10 - Health, Education, and Welfare - - Health - - - General
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
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