Skip to main content
Article thumbnail
Location of Repository

The Impact of Income Shocks on Health: Evidence from Cohort Data

By Jérome Adda, James Banks and Hans-Martin von Gaudecker


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 twenty-five year period in three different cross-sectional surveys we aggregate data by date-of-birth cohort to construct a ’synthetic cohort’ dataset 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 eighties and nineties to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effects on health, but do affect health behaviour and mortality.

OAI identifier:

Suggested articles


  1. (2006). A Healthy Economy Can Break Your Heart,” NBER Working Papers 12102,
  2. (1985). A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle,”
  3. (2000). Are Recessions Good For Your Health?,”
  4. (1994). Changes in the US Wage Structure 1963-1987: Application of Quantile Regression,”
  5. (1998). Consumption Inequality and Income Uncertainty,”
  6. (2006). Do Business Cycle Conditions at the Time of Labor Market Entry Affect Future Employment Prospects?,” The Review of Economics and
  7. (2002). Does drinking really decrease in bad times?,”
  8. (2006). Economic Conditions Early in
  9. (2002). Economic Status and Health in Childhood:
  10. (2005). Estimating the Effect of Income on Health and Mortality Using Lottery Prizes as Exogenous Source of Variation in
  11. (2003). Exploring the health-wealth nexus,”
  12. (2003). Good times make you sick,”
  13. (1998). Health, Income, and Inequality over the Life Cycle,”
  14. (2005). Healthy living in hard times,”
  15. (2003). Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Status,”
  16. (2004). Income Variance Dynamics and Heterogeneity,”
  17. (2004). Mortality, income, and income inequality over time
  18. (1999). Multi-Level Approaches to Understanding Social Determinants,” in Social Epidemiology,
  19. (1972). On the Concept of Health Capital and the Demand for Health,”
  20. (2001). Risk Pooling, Precautionary Saving and Consumption Growth,”
  21. (2000). Smoking, smoking cessation, and lung cancer in the UK since 1950: combination of national statistics with two case-control studies,”
  22. (1997). Socioeconomic Determinants of Health: Stress and the
  23. (2000). The Changing Distribution of
  24. (2005). The Relationship Between Education and Adult Mortality
  25. (1982). The Use of Time Series Processes to Model the Error Structure of Earnings in a Longitudinal Data Analysis,”
  26. (2004). Unraveling the SES-Health Connection,”
  27. (1993). What do we Learn about Consumer Demand Patterns from

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.