Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations

By H. Schwandt. American Economic Journal: Applied Economics, 2016

138 citations recorded by the source corpus.

Do wealth shocks affect the health of elderly in developed countries? I exploit the booms and busts in the US stock market as a natural experiment that generated considerable gains and losses in the wealth of stock-holding retirees. Using data from the 1998–2011 Health and Retirement Study, I construct wealth shocks as the interaction of stock holdings with stock market changes. These wealth shocks predict wealth changes and strongly affect health outcomes. A 10 percent wealth loss leads to an impairment of 2–3 percent of a standard deviation in physical health, mental health, and survival rates. (JEL D14, G11, G14, I12, J14)

Subfields: Accounting, Demography, General Health Professions

View Paper: https://www.semanticscholar.org/paper/bb4939728bc4512692416540f21bd7e7f2a5d4e8

Citations in the corpus

• Long-Run Effects of Lottery Wealth on Psychological Well-Being (2018, unknown): “…in wealth or income induced by lotteries (Brickman et al., 1978; Lindahl, 2005; Gardner and Oswald, 2007; Kuhn et al., 2011; Apouey and Clark, 2015), tax rebates (Lachowska, 2017), stock price fluctuations (Schwandt, 2018), or within-person changes over time (e.g. Frijters et al., 2004, 2006).”