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The Impact of Income Shocks on Health: Evidence from Cohort Data

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Author Info
Adda, Jérôme () (University College London)
Banks, James () (Institute for Fiscal Studies, London)
von Gaudecker, Hans-Martin () (Free University of Amsterdam)

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Abstract

We 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 twenty-five year period in three different cross-sectional surveys we aggregate data by date-of-birth cohort to construct a ‘synthetic cohort’ dataset 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 eighties and nineties to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effects on a wide range of health measures, but do lead to increases in mortality and risky health behaviour.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3329.

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Length: 2009 pages
Date of creation: Jan 2008
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Publication status: forthcoming in: Journal of the European Economic Association, 2009
Handle: RePEc:iza:izadps:dp3329

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Related research
Keywords: income shocks; health;

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Find related papers by JEL classification:
I1 - Health, Education, and Welfare - - Health
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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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.:
  1. Angus S. Deaton & Christina Paxson, 2001. "Mortality, Education, Income, and Inequality among American Cohorts," NBER Chapters, in: Themes in the Economics of Aging, pages 129-170 National Bureau of Economic Research, Inc. [Downloadable!]
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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. Halliday, Timothy, 2009. "Health Inequality over the Life-Cycle," IZA Discussion Papers 4369, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Timothy J. Halliday, 2007. "Income Risk and Health," Working Papers 200710, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
    Other versions:
  3. Timothy Halliday, 2007. "Income Volatility and Health," Working Papers 200729, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
    Other versions:
  4. Timothy J. Halliday, 2007. "Heterogeneity, State Dependence and Health," Working Papers 200716, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
    Other versions:
  5. Enrico Moretti, 2008. "Social Learning and Peer Effects in Consumption: Evidence from Movie Sales," NBER Working Papers 13832, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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This page was last updated on 2009-11-23.

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