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Income Risk and Health

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Author Info
Timothy J. Halliday () (Department of Economics, University of Hawaii at Manoa, John A. Burns School of Medicine, University of Hawaii at Manoa)

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Abstract

We investigate the impact of exogenous income shocks on health using twenty years of data from the Panel Study of Income Dynamics. 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.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_07-10R.pdf
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File Function: First version, 2007
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Publisher Info
Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200710.

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Length: 33 pages
Date of creation: 30 Mar 2007
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Handle: RePEc:hai:wpaper:2007010

Note: Revised version of WP 06-12.
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Related research
Keywords: Gradient; Health; Dynamic Panel Data Models; Recessions;

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Find related papers by JEL classification:
I0 - Health, Education, and Welfare - - General
I12 - Health, Education, and Welfare - - Health - - - Health Production
J1 - Labor and Demographic Economics - - Demographic Economics

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Gerdtham, Ulf-G. & Ruhm, Christopher J., 2006. "Deaths rise in good economic times: Evidence from the OECD," Economics and Human Biology, Elsevier, vol. 4(3), pages 298-316, December. [Downloadable!] (restricted)
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  4. Christopher J. Ruhm, 2000. "Are Recessions Good For Your Health?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 617-650, May. [Downloadable!] (restricted)
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  5. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-94, October.
    Other versions:
  6. Arellano, Manuel & Carrasco, Raquel, 2003. "Binary choice panel data models with predetermined variables," Journal of Econometrics, Elsevier, vol. 115(1), pages 125-157, July. [Downloadable!] (restricted)
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  7. Forbes, John F. & McGregor, Alan, 1984. "Unemployment and mortality in post-war Scotland," Journal of Health Economics, Elsevier, vol. 3(3), pages 239-257, December. [Downloadable!] (restricted)
  8. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-54, July. [Downloadable!] (restricted)
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  11. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr. [Downloadable!] (restricted)
  12. Ruhm, Christopher J., 2003. "Healthy Living in Hard Times," IZA Discussion Papers 711, Institute for the Study of Labor (IZA). [Downloadable!]
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  13. Jérome Adda & James Banks & Hans-Martin von Gaudecker, 2007. "The Impact of Income Shocks on Health: Evidence from Cohort Data," MEA discussion paper series 07146, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
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  14. Victor R. Fuchs, 1982. "Time Preference and Health: An Exploratory Study," NBER Working Papers 0539, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992-1), pages 1-76. [Downloadable!]
  16. Timothy Halliday, 2006. "The Impact of Aggregate and Idiosyncratic Income Shocks on Health Outcomes: Evidence from the PSID," Working Papers 200606, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
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  19. Jonathan Meer & Douglas L. Miller & Harvey S. Rosen, 2003. "Exploring the Health-Wealth Nexus," NBER Working Papers 9554, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May. [Downloadable!] (restricted)
  21. Michael Baker & Mark Stabile & Catherine Deri, 2004. "What Do Self-Reported, Objective, Measures of Health Measure?," Journal of Human Resources, University of Wisconsin Press, vol. 39(4). [Downloadable!] (restricted)
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  22. Anne C. Case & Angus Deaton, 2003. "Broken Down by Work and Sex: How Our Health Declines," NBER Working Papers 9821, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  23. Anne Case & Christina Paxson, 2004. "Sex Differences in Morbidity and Mortality," Working Papers 171, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies.. [Downloadable!]
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  24. Adda, Jerome & Chandola, Tarani & Marmot, Michael, 2003. "Socio-economic status and health: causality and pathways," Journal of Econometrics, Elsevier, vol. 112(1), pages 57-63, January. [Downloadable!] (restricted)
  25. Adams, Peter & Hurd, Michael D. & McFadden, Daniel & Merrill, Angela & Ribeiro, Tiago, 2003. "Healthy, wealthy, and wise? Tests for direct causal paths between health and socioeconomic status," Journal of Econometrics, Elsevier, vol. 112(1), pages 3-56, January. [Downloadable!] (restricted)
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  26. Timothy J Halliday, 2005. "Business Cycles, Migration and Health," Working Papers 200504, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
  27. Victor R. Fuchs, 1982. "Time Preference and Health: An Exploratory Study," NBER Chapters, in: Economic Aspects of Health, pages 93-120 National Bureau of Economic Research, Inc. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Timothy J. Halliday, 2006. "Testing for State Dependence with Time-Variant Transition Probabilities," Working Papers 200614, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
    Other versions:
  2. Sonia Bhalotra, 2007. "Fatal Fluctuations? - Cyclicality in Infant Mortality in India," The Centre for Market and Public Organisation 07/181, Department of Economics, University of Bristol, UK. [Downloadable!]
    Other versions:
  3. Timothy J. Halliday, 2007. "Heterogeneity, State Dependence and Health," Working Papers 200716, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
    Other versions:
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