RT Journal Article
SR Electronic
T1 How does income affect mental health and health behaviours? A quasi-experimental study of the earned income tax credit
JF Journal of Epidemiology and Community Health
JO J Epidemiol Community Health
FD BMJ Publishing Group Ltd
SP 929
OP 935
DO 10.1136/jech-2020-214841
VO 75
IS 10
A1 Laura Shields-Zeeman
A1 Daniel F. Collin
A1 Akansha Batra
A1 Rita Hamad
YR 2021
UL http://jech.bmj.com/content/75/10/929.abstract
AB Background Although research has repeatedly demonstrated the association between poverty, mental health, and health behaviours, there is limited evidence on the effects of interventions to improve these outcomes by addressing poverty directly. Moreover, most prior studies are often confounded by unobserved characteristics of individuals, making it difficult to inform possible interventions. We addressed this gap in the literature by leveraging quasi-random variation in the earned income tax credit (EITC)—the largest US poverty alleviation programme for families with children—to examine the effects on overall health, psychological distress, smoking, and alcohol consumption.Methods We used a large diverse national sample drawn from the Panel Study of Income Dynamics (N=34 824). We first conducted ordinary least squares (OLS) models to estimate the association of income and the EITC with the outcomes of interest. We subsequently employed a quasi-experimental instrumental variables (IV) analysis—in which EITC refund size was the instrument—to estimate the effect of income itself.Results In OLS models, higher income was associated with reductions in psychological distress, increased drinking, increased smoking, and more cigarettes per day, and larger EITC refunds were associated with reductions in psychological distress. In IV models, higher income was associated with decreased psychological distress.Conclusion These results suggest that typical correlational studies of the health effects of income may be confounded, although results may not generalise to income distributed in different ways than the EITC. The findings also provide valuable information for policymakers and researchers seeking to address socioeconomic disparities in mental health.Data are available in a public, open access repository. The source data for this study are publicly available from the website of the Panel Study of Income Dynamics, https://psidonline.isr.umich.edu.