We are grateful to John Addison and Jonathan Meer, as well as anonymous referees, for helpful suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w23667.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

This is the accepted version of the paper.This version of the publication may differ from the final published version. For causal identification we use increases in the UK minimum school leaving age in 1947 (from 14 to 15) and 1972 (from 15 to 16) to provide exogenous variation in education. These reforms predominantly induced adolescents who would have left school to stay for one additionally mandated year. OLS estimates suggest that education significantly increases health knowledge, with a one-year increase in schooling increasing the health knowledge index by 15% of a standard deviation. In contrast, estimates from instrumental-variable models show that increased schooling due to the education reforms did not significantly affect health knowledge. This main result is robust to numerous specification tests and alternative formulations of the health knowledge index. Further research is required to determine whether there is also no causal link between higher levels of education -such as post-school qualifications -and health knowledge. Permanent repository link

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The causal association between absolute income and health is well-established; however, the relationship between income inequality and health is not. The conclusions from the received studies vary across the region or country studied and/or the methodology employed. Using the Household, Income and Labour Dynamics in Australia panel survey, this paper investigates the relationship between mental health and inequality in Australia. A variety of income inequality indices are calculated to test both the income inequality and relative deprivation hypotheses. We find that mental health is only adversely affected by the presence of relative deprivation to a very small degree. In addition, we do not find support for the income inequality hypothesis. Importantly, our results are robust to a number of sensitivity analyses.

Do economic downturns encourage racist attitudes? Does this in-turn lead to worse labour market outcomes for minorities? We assess these important questions using British attitude and labour force data. The attitude data show that racial prejudice is countercyclical, with the effect driven by large increases for high-skilled middle-aged working men -a 1%-point increase in unemployment is estimated to increase self-reported racial prejudice by 4%-points. Correspondingly, the labour force data show that racial employment and wage gaps are counter-cyclical, with the largest effects also observed for high-skilled men, especially in the manufacturing and construction industries -a 1%-point increase in unemployment is estimated to increase the wage gap by 3%. These results are entirely consistent with the theoretical literature, which proposes that racial prejudice and discrimination are the result of labour market competition among individuals with similar traits, and that the effects of this competition are exacerbated during periods of economic downturn.