Poor and Sick: Estimating the Relationship between Household Income and Health

17 Pages Posted: 28 Jul 2011

See all articles by Athina Economou

Athina Economou

University of Macedonia - Department of Economics

Ioannis Theodossiou

University of Aberdeen - Business School

Date Written: September 2011

Abstract

This study evaluates the effect of the individual's household income on their health at the later stages of working life. A structural equation model is utilized in order to derive a composite and continuous index of the latent health status from qualitative health status indicators. The endogenous relationship between health status and household income status is taken into account by using IV estimators. The findings reveal a significant effect of individual household income on health before and after endogeneity is taken into account as well as a host of other factors known to influence health, including hereditary factors and the individual's locus of control. Importantly, it is also shown that the childhood socioeconomic position of the individual has long lasting effects on health as it appears to play a significant role in determining health during the later stages of working life.

Suggested Citation

Economou, Athina and Theodossiou, Ioannis, Poor and Sick: Estimating the Relationship between Household Income and Health (September 2011). Review of Income and Wealth, Vol. 57, Issue 3, pp. 395-411, 2011, Available at SSRN: https://ssrn.com/abstract=1897988 or http://dx.doi.org/10.1111/j.1475-4991.2010.00416.x

Athina Economou (Contact Author)

University of Macedonia - Department of Economics ( email )

Thessaloniki, 54006
Greece

Ioannis Theodossiou

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

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