Jason Alan Thompson
New York University
295 Lafayette Street 4th Floor
New York, NY 10003
NBER Working Papers and Publications
|March 2011||Health Shocks, Insurance Status and Net Worth: Intra- and Inter-Generational Effects|
with Dalton Conley: w16857
An extensive literature has documented a robust correlation between socioeconomic status--measured in a variety of ways--and health outcomes; however, much uncertainty remains regarding what causal processes underlie this association. The present paper builds on a growing literature that seeks to better document how and why wealth and SES are related. Specifically, we ask the extent to which health shocks affect net worth--a less-studied dimension of socioeconomic status. Given a lack of instruments that meet the exclusion restriction, we use data from the Panel Study of Income Dynamics to pursue a first-differences identification strategy. We estimate a parameter for acute illnesses (which should have a causal effect on wave-to-wave wealth changes) and compare this coefficient to a co...