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Health dynamics shape life-cycle incomes

Rainer Kotschy

Journal of Health Economics, 2021, vol. 75, issue C

Abstract: This paper empirically investigates the long-run effects of major health improvements on income growth in the United States. To isolate exogenous changes in health, the econometric model uses quasi-experimental variation in cardiovascular disease mortality across states over time. Based on data for the white population, the results show that there is a causal link between health and income per person, and they provide novel evidence that health dynamics shape life-cycle incomes. Life-cycle income profiles slope more strongly at the beginning and at the end of work life in 2000 than in 1960, indicating that age becomes a more prominent determinant of income dynamics over this period. The channels for this transformation include better health, higher educational attainment, and changing labor supply.

Keywords: Age; Mortality; Life expectancy; Productivity; Education; Labor supply (search for similar items in EconPapers)
JEL-codes: I15 J11 J24 J31 O40 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Health Dynamics Shape Life-Cycle Incomes (2019) Downloads
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DOI: 10.1016/j.jhealeco.2020.102398

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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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