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

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.