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Income Risk and Health

Author

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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.

Suggested Citation

  • Timothy Halliday, 2006. "Income Risk and Health," Working Papers 200612, University of Hawaii at Manoa, Department of Economics.
  • 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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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_06-12.pdf
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    References listed on IDEAS

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    Cited by:

    1. Timothy J. Halliday, 2008. "Heterogeneity, state dependence and health," Econometrics Journal, Royal Economic Society, vol. 11(3), pages 499-516, November.
    2. Bhalotra, Sonia, 2010. "Fatal fluctuations? Cyclicality in infant mortality in India," Journal of Development Economics, Elsevier, vol. 93(1), pages 7-19, September.
    3. Timothy Halliday, 2007. "Testing for State Dependence with Time-Variant Transition Probabilities," Econometric Reviews, Taylor & Francis Journals, vol. 26(6), pages 685-703.

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    More about this item

    Keywords

    Gradient; Recessions; Health; Dynamic Panel Data Models;
    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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