DP10728 The Effect of Income on Mortality - New Evidence for the Absence of a Causal Link

Author(s): Alexander Ahammer, Gerard Thomas Horvath, Rudolf Winter-Ebmer
Publication Date: July 2015
Keyword(s): income, mortality, wage decomposition
JEL(s): I10, J14, J31
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10728

We analyze the effect of income on mortality in Austria using administrative social security data. To tackle potential endogeneity concerns arising in this context, we estimate time-invariant firm-specific wage components and use them as instruments for actual wages. While we do find quantitatively small yet statistically significant effects in our naïve least squares estimations, IV regressions reveal a robust zero-effect of income on ten-year death rates for prime-age workers, both in terms of coecient magnitude and statistical significance. These results are robust to a number of different sample specifications and both linear and non-linear estimation methods.