Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations

Hannes Schwandt

No 12562, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Do wealth shocks affect the health of elderly in developed countries? I exploit the booms and busts in the US stock market as a natural experiment that generated considerable gains and losses in the wealth of stock-holding retirees. Using data from the 1998-2011 Health and Retirement Study I construct wealth shocks as the interaction of stock holdings with stock market changes. These wealth shocks predict wealth changes and strongly affect health outcomes. A 10% wealth loss leads to an impairment of 2-3% of a standard deviation in physical health, mental health and survival rates.

Keywords: Wealth shocks; Health; Mortality; stock market; Retirees (search for similar items in EconPapers)
JEL-codes: G10 I10 J14 (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-fmk and nep-hea
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Citations: View citations in EconPapers (72)

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Related works:
Journal Article: Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations (2018)
Working Paper: Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations (2014)
Working Paper: Wealth shocks and health outcomes: evidence from stock market fluctuations (2014)
Working Paper: Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations (2014)
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