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

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Author Info
Jérome Adda
James Banks
Hans-Martin von Gaudecker (Mannheim Research Institute for the Economics of Aging (MEA))

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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 health, but do affect health behaviour and mortality.

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Paper provided by Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim in its series MEA discussion paper series with number 07146.

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Date of creation: 13 Aug 2007
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Handle: RePEc:mea:meawpa:07146

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Postal: MEA - Mannheimer Forschungsinstitut Ökonomie und Demographischer Wandel, L13, 17, University of Mannheim, 68131 Mannheim
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  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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  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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  2. Timothy Halliday, 2007. "Income Volatility and Health," Working Papers 200729, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
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  3. Timothy J. Halliday, 2007. "Heterogeneity, State Dependence and Health," Working Papers 200716, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
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  4. 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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