The Effects of Income on Health: New Evidence from the Earned Income Tax Credit
51 Pages Posted: 22 Jul 2015 Last revised: 5 May 2017
Date Written: March 23, 2017
This study examines the relationship between income and health by using an expansion of the Earned Income Tax Credit (EITC) as exogenous variations of earnings. The paper adds to previous work in three ways. First, I estimate treatment effects on the treated using simulated EITC benefits and longitudinal data to remove concerns about measurement error and sample selection. Second, I test whether health effects vary across the EITC schedule. Third, I examine the role of food expenditures and health insurance as potential mechanisms. The study finds that income improves health, while food expenditures and insurance coverage are likely channels.
Keywords: Income; Health, Earned Income Tax Credit, Mechanisms
JEL Classification: I14, I38, J38
Suggested Citation: Suggested Citation