Income and health: the time dimension.

It is widely recognised that poverty is associated with poor health even in advanced industrial societies. But most existing studies of the relationship between the availability of financial resources and health status fail to distinguish between the transient and permanent impact of poverty on health. Many studies also fail to address the possibility of reverse causation; poor health causes low income. This paper aims to address these issues by moving beyond the static perspective provided by cross-sectional analyses and focusing on the dynamic nature of people's experiences of income and health. The specific objective is to investigate the relationship between income and health for adult participants in the British Household Panel Survey from 1991 to 1996/97. The paper pays particular attention to: the problem of health selection; the role of long-term income; and, the effect of income dynamics on health. The results confirm the general findings from the small number of longitudinal studies available in the international literature: long-term income is more important for health than current income; income levels are more significant than income change; persistent poverty is more harmful for health than occasional episodes; and, income reductions appear to have a greater effect on health than income increases. After controlling for initial health status the association between income and health is attenuated but not eliminated. This suggests that there is a causal relationship between low income and poor health.