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The Impact of Aggregate and Idiosyncratic Income Shocks on Health Outcomes: Evidence from the PSID

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Author Info
Timothy Halliday () (Department of Economics, University of Hawaii at Manoa, John A. Burns School of Medicine, University of Hawaii at Manoa)

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Abstract

In this paper, we investigate the impact of aggregate and idiosyncratic economic shocks on health using data on self-reported health status and mortality from the Panel Study of Income Dynamics. First, we document a large correlation between poor macroeconomic conditions and mortality for working-aged men. This correlation is robust to controls for baseline health which mitigates concerns that the correlation is the result of selection. There is no relationship between macroeconomic conditions and mortality for women. Next, to better understand how much of this correlation is the result of a causal impact of income shocks on health, we use methods from the literature on dynamic panel data models. Doing this, we find evidence of a causal impact of income shocks on health for working-aged men at the lowest parts of the income distribution. Finally, our analysis provides no evidence that recessions are good for your health.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_06-6.pdf
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File Function: First version, 2006
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Publisher Info
Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200606.

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Length: 51 pages
Date of creation: 2006
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Handle: RePEc:hai:wpaper:200606

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Related research
Keywords: gradient; recessions; health; dynamic panel data models;

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Find related papers by JEL classification:
I0 - Health, Education, and Welfare - - General
I12 - Health, Education, and Welfare - - Health - - - Health Production
J1 - Labor and Demographic Economics - - Demographic Economics

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Timothy J. Halliday, 2007. "Income Risk and Health," Working Papers 200710, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
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