The causal effect of income on health: evidence from German reunification.
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.
Frijters
Paul
P
RSSS, Australian National University, Australia.
Haisken-DeNew
John P
JP
Shields
Michael A
MA
D000328:Adult; D003258:Consumer Behavior / Q000706:statistics & numerical data; D005260:Female; D005858:Germany; D006304:Health Status; D006801:Humans; D008297:Male; D008875:Middle Aged; D017059:Models, Econometric; D012923:Social Class