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Income Risk and Health

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  • Timothy Halliday

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

Abstract

We investigate the impact of exogenous income shocks on health using twenty years of data from the Panel Study of Income Dynamic. To unravel the impact of income on health from unobserved heterogeneity and reverse causality, we employ techniques from the literature on the estimation of dynamic panel data models. Contrary to much of the previous literature on the gradient, we find that, on average, adverse income shocks lead to a deterioration of health. These effects are most pronounced for working-aged men and are dominated by transitions into the very bottom of the earnings distribution. We also provide suggestive evidence of an association between negative income shocks and higher mortality for working-aged men.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_06-12.pdf
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200612.

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Length: 31 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:hai:wpaper:200612

Note: Revised version of WP:06-6, The Impact of Aggregate and Idiosyncratic Income Shocks on Health: Evidence from the PSID
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Keywords: Gradient; Recessions; Health; Dynamic Panel Data Models;

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Cited by:
  1. Sonia Bhalotra, 2007. "Fatal Fluctuations? - Cyclicality in Infant Mortality in India," The Centre for Market and Public Organisation 07/181, Department of Economics, University of Bristol, UK.
  2. Timothy J. Halliday, 2006. "Testing for State Dependence with Time-Variant Transition Probabilities," Working Papers 200614, University of Hawaii at Manoa, Department of Economics.
  3. Timothy J. Halliday, 2007. "Heterogeneity, State Dependence and Health," Working Papers 200716, University of Hawaii at Manoa, Department of Economics.

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