The impact of income shocks on health: Evidence from cohort data

J. Adda, J. Banks, H.K.G. von Gaudecker

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

We study the effect of permanent income innovations on health for a prime-aged population. Using information on more than half a million individuals sampled over a 25-year period in three different cross-sectional surveys we aggregate data by date-of-birth cohort to construct a "synthetic cohort" data set with details of income, expenditure, socio-demographic factors, health outcomes, and selected risk factors. We then exploit structural and arguably exogenous changes in cohort incomes over the 1980s and 1990s to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effect on a wide range of health measures, but do lead to increases in mortality and risky health behaviour. (JEL: I10, D31). © 2009 by the European Economic Association.
Original languageEnglish
Pages (from-to)1361-1399
JournalJournal of the European Economic Association
Volume7
Issue number6
DOIs
Publication statusPublished - 2009

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