The Long-Run Effect of Income on Health: Evidence from the Earned Income Tax Credits

Lauren Jones, The Ohio State University
Guangyi Wang , The Ohio State University
Tansel Yilmazer, The Ohio State University

This study examines the long-term effect of the Earned Income Tax Credit (EITC) on physical and mental health of women using exogenous policy variation. Using data from the NLSY79, we relate lifetime exposure to the EITC policy to measures of health status at age 50. We find that higher EITC exposure led to improvements in physical health by reducing the occurrence of illnesses that limit moderate and work activities and lowering the likelihood of the onset of a severe illness. However, we do not find any significant positive effects of EITC on mental health. Our findings suggest that the EITC improves physical health through multiple channels by raising income and improving health behaviors.

See paper

 Presented in Session 65. Income, Wealth, and Health