Getting money is good for your health, but working hard for your money, in the way people work harder in boom times, and spending it with gusto, in the way people spend more after payday, is bad for your health. Here is the evidence.
First, higher income seems consistently correlated with better health. There have been arguments about the direction of causation, but this ’05 paper suggests much of the relation is due to higher income causing better health:
This paper studies the effects of income on health and mortality, using only the part of income variation due to a truly exogenous factor: monetary lottery prizes of individuals. The findings are that higher income causally generates good health and that this effect is of a similar magnitude as when traditional estimation techniques are used. A 10 percent income increase improves health by about 4–5 percent of a standard deviation
However, we also consistently find that folks are less healthy in economic boom times. For example:
There is a counter-cyclical variation in physical health that is especially pronounced for individuals of prime-working age, employed persons, and males. The negative health effects of economic expansions persist or accumulate over time, are larger for acute than chronic ailments, and occur despite a protective effect of income and a possible increase in the use of medical care.
Two new papers similarly find lower health after we get expected income payments,
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.
such as paychecks at the first of the month:
We document a within-month mortality cycle where deaths decline before the 1st day of the month and then spike after the 1st. This cycle is present across a wide variety of causes and demographic groups. A similar cycle exists for a range of activities, suggesting the mortality cycle may be due to short-term variation in levels of activity. We provide evidence that the within-month activity cycle is generated by liquidity. Our results suggest a causal pathway whereby liquidity problems reduce activity, which in turn reduces mortality. These relationships help explain the pro-cyclic nature of mortality.
Health can be so so complicated!