The causal effect of income on health: Evidence from German reunification

Paul Frijters; John P. Haisken-DeNew; Michael A. Shields

doi:10.1016/j.jhealeco.2005.01.004

The causal effect of income on health: Evidence from German reunification

Paul Frijters, John P. Haisken-DeNew, Michael A. Shields^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

242 Citations (Scopus)

Abstract

We investigate whether there was a causal effect of income changes on the health satisfaction of East and West Germans in the years following reunification. Our data source is the German Socio-Economic Panel (GSOEP) between 1984 and 2002, and we fit a recently proposed fixed-effects ordinal estimator to our health measures and use a causal decomposition technique to account for panel attrition. We find evidence of a significant positive effect of income changes on health satisfaction, but the quantitative size of this effect is small. This is the case with respect to current income and a measure of 'permanent' income.

Original language	English
Pages (from-to)	997-1017
Number of pages	21
Journal	Journal of Health Economics
Volume	24
Issue number	5
DOIs	https://doi.org/10.1016/j.jhealeco.2005.01.004
Publication status	Published - Sept 2005

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title = "The causal effect of income on health: Evidence from German reunification",

abstract = "We investigate whether there was a causal effect of income changes on the health satisfaction of East and West Germans in the years following reunification. Our data source is the German Socio-Economic Panel (GSOEP) between 1984 and 2002, and we fit a recently proposed fixed-effects ordinal estimator to our health measures and use a causal decomposition technique to account for panel attrition. We find evidence of a significant positive effect of income changes on health satisfaction, but the quantitative size of this effect is small. This is the case with respect to current income and a measure of 'permanent' income.",

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AU - Shields, Michael A.

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AB - We investigate whether there was a causal effect of income changes on the health satisfaction of East and West Germans in the years following reunification. Our data source is the German Socio-Economic Panel (GSOEP) between 1984 and 2002, and we fit a recently proposed fixed-effects ordinal estimator to our health measures and use a causal decomposition technique to account for panel attrition. We find evidence of a significant positive effect of income changes on health satisfaction, but the quantitative size of this effect is small. This is the case with respect to current income and a measure of 'permanent' income.

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KW - German reunification

KW - Health

KW - Income

KW - Panel data

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JO - Journal of Health Economics

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The causal effect of income on health: Evidence from German reunification

Abstract

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