The tax-free year in Iceland: A natural experiment to explore the impact of a short-term increase in labor supply on the risk of heart attacks

• Published in: Journal of Health Economics
• Main Authors: Ólafsdóttir, Thorhildur, Hrafnkelsson, Birgir, Thorgeirsson, Gudmundur, Ásgeirsdóttir, Tinna Laufey
• Other Authors: University of Iceland, Oddi v/Sturlugötu, Reykjavík, Iceland b University of Iceland, Dunhagi 5, Reykjavík, Iceland c Landspitali, National University Hospital, University of Iceland, Hringbraut, Reykjavik, Iceland
• Format: Article in Journal/Newspaper
• Language: English
• Published: Elsevier 2016
• Subjects: CAR12; Myocardial Infarction; Coronary Disease; Employment; Work; Iceland; Economics; Income Tax
• Online Access: http://hdl.handle.net/2336/618661; https://doi.org/10.1016/j.jhealeco.2016.06.006

To access publisher's full text version of this article. Please click on the hyperlink in Additional Links field. Evidence is mixed on whether society-wide economic conditions affect cardiovascular health and the reasons for the suggested relationship are largely untested. We explore whether a short-term increase in labor supply affects the probability of acute myocardial infarctions, using a natural experiment in Iceland. In 1987 personal income taxes were temporarily reduced to zero, resulting in an overall increase in labor supply. We merge and analyze individual-level, registry-based data on earnings and AMIs including all Icelandic men and women aged 45–74 during the period 1982–1992. The results support the prominent hypothesis of increased work as a mechanism explaining worsening heart health in upswings, for men aged 45–64 who were self-employed. We furthermore find a larger increase in probability of AMIs during the tax-free year in men aged 45–54 than men aged 55–64. University of Iceland Research Fund, Icelandic Research Fund / 130611-051 Icelandic Student Innovation Fund.