Labor Income Risk and Health Outcomes
- Presenter:
Chair: Tom Selden; Discussant: TBA Tue June 6, 2006 13:45-15:15 Room 226
This paper uses data from the Panel Study of Income Dynamics (PSID) to investigate the impact of earnings risk on health. We show that good health exhibits pro-cyclical variation in the PSID for working-aged men and women. To identify the impact of shocks to income and labor supply on health, we estimate a dynamic, linear model using moment restrictions that allow for health to impact labor supply. Doing this, we find that income shocks exert strong negative impacts on the health of working-aged men, but macroeconomic conditions do not impact health once we control for income and labor supply. For women, however, macroeconomic conditions still impact health even after controlling for income and labor supply. We provide some indirect evdence that suggests that this is reflecting the impact of shocks to the husband’s income on the health of the wife.
