Wealth shocks and health outcomes: Evidence from stock market fluctuations

Hannes Schwandt*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

43 Scopus citations


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

Original languageEnglish (US)
Pages (from-to)349-377
Number of pages29
JournalAmerican Economic Journal: Applied Economics
Issue number4
StatePublished - Oct 1 2018

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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