Health Dynamics Shape Life-Cycle Incomes

Rainer Kotschy

No 7953, CESifo Working Paper Series from CESifo

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. 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. Compared to previous generations, life-cycle income profiles slope more strongly at the beginning and at the end of work life, such that age becomes a more prominent determinant of income dynamics. 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: 2019
New Economics Papers: this item is included in nep-age, nep-hea and nep-lab
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Related works:
Journal Article: Health dynamics shape life-cycle incomes (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7953

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