Dundee Discussion Papers in Economics 263: Handling the endogeneity of income to health using a field experiment in Taiwan

Fu-Min Tseng, Dennis Petrie

    Research output: Working paper/PreprintDiscussion paper

    Abstract

    This paper uses an exogenous increase in income for a specific sub-group in Taiwan to explore the extent to which higher income leads to higher levels of health and wellbeing. In 1995, the Taiwanese government implemented the Senior Farmer Welfare Benefit Interim Regulation (SFWBIR) which was a pure cash injection, approximately US$110 (£70) per month in 1996, to
    senior farmers. A Difference-in-differences (DiD) approach is used on survey data from the Taiwanese Health and Living Status of Elderly in 1989 and 1996 to evaluate the short term effect of the SFWBIR on self-assessed health, depression, and life satisfaction. Senior manufacturing workers are employed as a comparison group for the senior farmers in the natural experiment because their demographic backgrounds are similar. This paper provides evidence that the
    increase in income from the SFWBIR significantly improved the mental health of senior farmers
    by reducing the scale of depression (CES-D) by 1.718, however, it had no significant short term impact on self-assessed health or life satisfaction.
    Original languageEnglish
    PublisherUniversity of Dundee
    Number of pages23
    Publication statusPublished - Feb 2012

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.263
    ISSN (Print)1473-236X

    Keywords

    • social welfare benefit
    • life satisfaction
    • mental health
    • Natural experiment
    • difference-in-differences

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