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Title: Health Dynamics Shape Life-Cycle Incomes

Citation Type: Working Paper

Publication Year: 2019

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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.

Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3493665

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Authors: Kotschy, Rainer

Series Title: CESifo Working Paper Series

Publication Number: 7953

Institution: CESifo

Pages: 52

Publisher Location:

Data Collections: IPUMS USA

Topics: Health

Countries: United States