New paper on what happens to people after sudden cash windfalls. Or, as I like to call it, how IPOs can kill you.
Researchers and retailers have documented that consumption declines before the receipt of income, and then rises afterwards. In this paper, we identify a related phenomenon, where mortality rises immediately after 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, and occurs for many different causes of death.
We examine whether mortality increases after regular and one-off payments. Short-term mortality patterns suggest deaths rises after income payments. We test whether mortality changes after five different income payments. In each case, mortality increases for about one week after income receipt. In some cases, the increase in mortality is offset by a later reduction in deaths.
You can find an earlier, ungated copy of the paper here.