Don’t choke on that cheque

Household stimulus payments can be too stimulating, it seems.

The Short-Term Mortality Consequences of Income Receipt (gated stable link, ungated unstable link)
William Evans & Timothy Moore
Many studies find that households increase their consumption after the receipt of expected income payments, a result inconsistent with the life-cycle/permanent income hypothesis. Consumption can increase adverse health events, such as traffic accidents, heart attacks and strokes. In this paper, we examine the short-term mortality consequences of income receipt. We find that mortality increases following the arrival of monthly Social Security payments, regular wage payments for military personnel, the 2001 tax rebates, and Alaska Permanent Fund dividend payments. The increase in short-run mortality is large, potentially eliminating some of the protective benefits of additional income.

Fortunately, the effect seems to be largely due to timing. As the authors note:

We find in both cases that a short-term increase in mortality is offset by a subsequent decrease in deaths, suggesting that much of the immediate effect we estimate is actually short-term mortality displacement.

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