Health and Wealth Accumulation: Evidence from Nineteenth-Century America

Chulhee Lee

NBER Working Paper No. 10035
Issued in October 2003
NBER Program(s):Development of the American Economy

This study explores how the health of Union Army recruits while in the service affected their wealth accumulation through 1870. Wartime wounds and exposure to combat, measured by the company mortality from wounds, had strong negative effects on subsequent savings. Variables on illnesses while in service, if corrected for the potential bias arising from omitted variables by using instrumental variables, also greatly diminished wealth accumulations. The economic impact of poor health was particularly strong for unskilled workers. These results suggest that health was a powerful determinant of economic mobility in the nineteenth century. The strong influences on wealth accumulations of various infectious diseases, such as malaria, typhoid, and diarrhea, found in this study point out that the economic gains from the improvement of the disease environment should be enormous. This study also suggests that the direct economic costs of the Civil War were probably much greater than previously thought, if the persistent adverse effects of wartime experiences on veterans' health are considered.

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Document Object Identifier (DOI): 10.3386/w10035

Published: Lee, Chulhee, 2005. "Wealth Accumulation and the Health of Union Army Veterans, 1860 1870," The Journal of Economic History, Cambridge University Press, vol. 65(02), pages 352-385, June.

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