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Income Volatility and Health

Author

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  • Timothy Halliday

    (Department of Economics & John A. Burns School of Medicine, University of Hawaii at Manoa
    Institute for Labor Study (IZA))

Abstract

We investigate the impact of exogenous income fluctuations on health using twenty years of data from the Panel Study of Income Dynamics. 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 health and socio-economic status, 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.

Suggested Citation

  • Timothy Halliday, 2007. "Income Volatility and Health," Working Papers 200729, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200729
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    References listed on IDEAS

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    Cited by:

    1. Avram, Silvia, 2020. "Labour market flexibility and unemployment duration: evidence from the UK," ISER Working Paper Series 2020-11, Institute for Social and Economic Research.
    2. Deborah J Schofield & Emily J Callander & Rupendra N Shrestha & Megan E Passey & Richard Percival & Simon J Kelly, 2013. "Multiple Chronic Health Conditions and Their Link with Labour Force Participation and Economic Status," PLOS ONE, Public Library of Science, vol. 8(11), pages 1-1, November.
    3. Gunasekara, Fiona Imlach & Carter, Kristie & Blakely, Tony, 2011. "Change in income and change in self-rated health: Systematic review of studies using repeated measures to control for confounding bias," Social Science & Medicine, Elsevier, vol. 72(2), pages 193-201, January.
    4. Elena Reche & Hans-Helmut König & André Hajek, 2021. "The Relationship between Income and Morbidity—Longitudinal Findings from the German Ageing Survey," IJERPH, MDPI, vol. 18(23), pages 1-14, November.
    5. Timothy Halliday, 2011. "Earnings Growth and Movements in Self-Reported Health," Working Papers 201117, University of Hawaii at Manoa, Department of Economics.
    6. Elena Reche & Hans-Helmut König & André Hajek, 2019. "Income, Self-Rated Health, and Morbidity. A Systematic Review of Longitudinal Studies," IJERPH, MDPI, vol. 16(16), pages 1-16, August.
    7. Silvia Avram & Mike Brewer & Paul Fisher & Laura Fumagalli, 2022. "Household Earnings and Income Volatility in the UK, 2009–2017," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(2), pages 345-369, June.
    8. Xiaodong Cui & Ching-Ter Chang, 2021. "How Income Influences Health: Decomposition Based on Absolute Income and Relative Income Effects," IJERPH, MDPI, vol. 18(20), pages 1-14, October.
    9. Melinda Podor & Timothy J. Halliday, 2012. "Health status and the allocation of time," Health Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 514-527, May.
    10. Veenstra, Gerry & Vanzella-Yang, Adam, 2020. "Family income and self-rated health in Canada: Using fixed effects models to control for unobserved confounders and investigate causal temporality," Social Science & Medicine, Elsevier, vol. 250(C).

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    More about this item

    Keywords

    Gradient; Health; Dynamic Panel Data Models; Recessions;
    All these keywords.

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J1 - Labor and Demographic Economics - - Demographic Economics

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