Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2014:32: Income Receipt and Mortality – Evidence from Swedish Public Sector Employees

Elvira Andersson (), Petter Lundborg () and Johan Vikström ()
Additional contact information
Elvira Andersson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Petter Lundborg: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Johan Vikström: IFAU, Postal: Ifau, Box 513, 751 20 Uppsala

Abstract: In this paper, we study the short-run effect of salary receipt on mortality among Swedish public sector employees. By using data on variation in paydays across work-places, we completely control for mortality patterns related to, for example, public holidays and other special days or events coinciding with paydays and for general within-month and within-week mortality patterns. We find a dramatic increase in mortality on the day salaries arrive. The increase is especially pronounced for younger workers and for deaths due to activity-related causes such as heart conditions and strokes. Additionally, the effect is entirely driven by an increase in mortality among low income individuals, who are more likely to experience liquidity constraints. All things considered, our results suggest that an increase in general economic activity on salary receipt is an important cause of the excess mortality.

Keywords: Income; Mortality; Health; Consumption; Liquidity constraints; Permanent income hypothesis

JEL-codes: D91; H31; H55; I10; I12; I38

30 pages, August 10, 2014

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