Income Risk and Health

Timothy Halliday

No 200612, Working Papers from University of Hawaii at Manoa, Department of Economics

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.

Keywords: Gradient; Recessions; Health; Dynamic Panel Data Models (search for similar items in EconPapers)
JEL-codes: I0 I12 J1 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2006
New Economics Papers: this item is included in nep-hea and nep-ias
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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Citations: View citations in EconPapers (5)

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http://www.economics.hawaii.edu/research/workingpapers/WP_06-12.pdf First version, 2006 (application/pdf)

Related works:
Working Paper: Income Risk and Health (2007)
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