Essays in finance & health

This dissertation studies how financial and health shocks affect people’s economic behavior and well-being. The first chapter shows that corporate financial frictions can worsen employee mental health by increasing job insecurity. The chapter uses data on antidepressant use among employees of firms that faced different degrees of difficulty in refinancing their debt during the 2008-2009 credit crunch. The second chapter estimates the impact of 334 different health shocks on medical and economic outcomes, and quantifies the benefits of eliminating these diseases using an economic model. The results reveal that people with low or high income would benefit distinctly from eliminating certain diseases. Finally, the third chapter investigates how life expectancy affects people’s financial and economic decisions. The chapter studies a unique sample of individuals who undergo genetic testing for a hereditary cancer syndrome. The results show that people who learn about a decrease in their life expectancy accumulate less wealth than those who learn about an increase in their life expectancy. They do so by working less and investing their money more conservatively, while their consumption levels are hardly impacted.