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Long-term health effects of family income received at different stages in the life cycle

Mcinnis, Nicardo
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Abstract

When studying longer-term outcomes, there might be complicated dynamics which can only be understood by taking a holistic life cycle approach. I estimate the long-term health effects of family income received at different phases in the life cycle from conception up to the point at which health outcomes are observed in early adulthood. I construct a unique life-course data set from conception up to age 32, using the Panel Study of Income Dynamics. Employing a two-stage least squares estimator, I instrument for family income with two instruments: simulated income and simulated Earned Income Tax Credit benefits. For health status as of age 32, I find that beneficial health effects are primarily from income received after age 18, but income in the early childhood years also has beneficial long-term effects. I also find some suggestive evidence that income in the teenage years may have adverse long-term health effects. Similar patterns are observed for risky health behaviors such as drinking and smoking, with strong evidence that more income during the teenage years increases participation in these behaviors in early adulthood. These results indicate that the relative timing of income receipt matters for long-term health outcomes.

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Date
5/4/2020
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Research Projects
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Keywords
Income, Health, Instrumental Variables, Long-term, Life cycle
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