2013 Conference

Health

Financial Services

Using the 1999-2009 waves of the Panel Study of Income Dynamics, this paper examines the impact of adverse health events experienced by the husbands or the wives on entrepreneurial outcomes of coupled households. We find that households affected by health problems are significantly less likely to engage in entrepreneurial activities, especially via an unincorporated business. The family income from unincorporated business diminishes, both in the short and in the long time horizons, after the husband is diagnosed with a new health condition. However, a new health condition developed by the wife actually increases the family’s business income. This effect is explained by increased labor supply of the husband.