Income Volatility and Health

36 Pages Posted: 23 May 2008

See all articles by Timothy Halliday

Timothy Halliday

University of Hawaii - Department of Economics; IZA Institute of Labor Economics


We investigate the impact of exogenous income fluctuations on health using twenty years of data from the Panel Study of Income Dynamics using techniques from the literature on the estimation of dynamic panel data models. Contrary to much of the previous literature on health and socio-economic status, we find that, on average, adverse income shocks lead to a deterioration of health. These effects are most pronounced for working-aged men and are dominated by transitions into the very bottom of the earnings distribution.

Keywords: gradient, health, dynamic panel data models, recessions

JEL Classification: I0, I12, J1

Suggested Citation

Halliday, Timothy, Income Volatility and Health. IZA Working Paper No. 3234, Available at SSRN: or

Timothy Halliday (Contact Author)

University of Hawaii - Department of Economics ( email )

Honolulu, HI 96822
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

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