Department of Economics
University of Delaware
Working Paper #2005-18
Why Does the Relationship between Economic Status and Child Health Strengthen for Older Children in the U.S.? Evidence from the Medical Expenditures Panel Survey and the Panel Study of Income Dynamics
Case, Lubotsky, and Paxson (2002), using cross-sectional data, found a positive relationship between health and income and that the income relationship becomes more protective of children from higher income families as children age. Currie and Stabile (2003) point out that panel data allow the researcher to differentiate between the mechanisms underlying this relationship. Using a panel of Canadian children, they find that low-SES children respond to health shocks in the same way as high-SES children but that low-SES children, compared to high-SES children, are subject to more shocks as they age. To our knowledge we are unaware of any studies of the gradient that use panels of U.S. children. Our study utilizes the Medical Expenditures Panel Survey and the Child Development Supplements of the PSID. Our results for U.S. children are contrary to those found for children in Canada.