This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Journal: Applied Economics
  4. October 2018
  5. Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations

Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations

Download Full Text PDF

Abstract

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% wealth loss leads to an impairment of 2–3% of a standard deviation in physical health, mental health and survival rates.

Citation

Schwandt, Hannes. 2018. "Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations." American Economic Journal: Applied Economics, 10 (4): 349-77. DOI: 10.1257/app.20140499

Additional Materials

JEL Classification

  • D14 Household Saving; Personal Finance
  • G11 Portfolio Choice; Investment Decisions
  • G14 Information and Market Efficiency; Event Studies; Insider Trading
  • I12 Health Behavior
  • J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
There are no comments for this article.
Login to Comment