This paper estimates the demand for health among low-wage American workers. I incorporate theoretical assumptions and empirical findings from the fields of food and health economics to derive a utility-maximization framework, which posits health is a normal good. Using data from the Panel Study on Income Dynamics, I then regress an ordered probit random effects model to isolate the effect of income fluctuations on health over time. These results are statistically significant and robust to numerous specification checks, suggesting low-wage workers experience improved health levels as their wages increase. These findings deserve further inquiry to better-inform the current public debate over low-income workers’ wages.
Stern, Cory, "How Do Incremental Wage Increases Affect Low-Wage Workers’ Health Levels?" (2015). Award Winning Economics Papers. 16.
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