The Effects of Income on Health – New Evidence from the Earned Income Tax Credit (2018, Review of Economics of the Household)
This study examines the relationship between income and health by using an expansion of the Earned Income Tax Credit (EITC), which increased benefits to households with at least two children, as a source of exogenous variations of earnings. The paper adds to previous work by: (1) estimating treatment effects on the treated using simulated EITC benefits and longitudinal data; (2) testing whether health effects vary across the three different parts of the EITC schedule; (3) examining the role of food expenditures and health insurance as potential mechanisms. The study finds that income improves the likelihood of affected heads of households reporting to be in excellent or very good health by 6.9 to 8.9 percentage points. The effects are largest in the plateau phase of the EITC schedule, where previous researchers have identified pure income effects of the program. The results are robust to several additional specifications, including a semi-parametric DD model and specifications that account for the potential endogeneity of sample. When examining potential channels underlying the relationship between income and health, I find that affected household increase their food expenditures by 10.5 to 20.3 percent and are 1.52 percent more likely to have health insurance coverage.
Do Higher Minimum Wages Benefit Health – Evidence from the UK (2017, Journal of Policy Analysis and Management)
This study examines the link between minimum wages and health outcomes by using the introduction of the National Minimum Wage (NMW) in the United Kingdom as an exogenous variation of earned income. I test for health effects of the policy change by using longitudinal data from the British Household Panel Survey for a period of ten years. I find that the NMW significantly improved several measures of health, including self-reported health status and the presence of health conditions. When examining potential mechanisms, I show that changes in health behaviors, leisure expenditures and financial stress can explain the observed improvements in health.
The Role of Economic Shocks on Health – Evidence from German Reunification (2017, Southern Economic Journal)
Sudden economic shocks impact the everyday lives of people from one day to the next. A number of studies have examined the association between economic fluctuations and health, however, no consensus on the nature of this relationship has been established. By exploiting the dramatic economic fluctuations following the German Reunification of 1990, which included a sudden change from a socialist to a capitalist system in East Germany, this study examines the association between broad negative economic shocks and health. The paper finds that increases in state unemployment rates are associated with large and statistically significant declines in health outcomes. Estimates are stronger for people who became unemployed shortly after reunification, for low-income individuals, and for East Germans, a group confronted with larger economic fluctuations. When examining potential mechanisms that could explain the observed health deteriorations, the study finds significant reductions in exercise frequency, increases in economic uncertainty and overall stress.
The Effect of the Health Insurance Mandate on Labor Market Activity and Time Allocation – Evidence from the Federal Dependent Coverage Provision (with Vinish Shrestha; 2017, forthcoming at: Forum for Health Economics & Policy)
The primary goal of the federal dependent coverage mandate was to increase health insurance coverage among young adults, the group with the lowest prevalence of health insurance coverage. To understand the full impacts of the federal dependent coverage mandate, it is important to evaluate how the mandate affects labor market activities and time spent away from work among young adults. Using data from the Consumer Population Survey (CPS) and the American Time Use Survey (ATUS) and implementing a difference-in-differences framework, we find: 1) Young adults substitute employer sponsored insurance for dependent coverage, 2) Affected individuals reduce their work time and switch from full- to part-time employment, and 3) The additional time from reduced labor market activity is reallocated towards more time spent on leisure activities, mainly watching television. The effects of the mandate on labor market activities are stronger in later years. Furthermore, we show that young adults do not increase the time they spend on activities that could enhance their human capital such as education and health, which reemphasizes potential unintended consequences of the mandate. These findings suggest that future work is necessary to fully understand the overall welfare effects of the policy.