Working Paper: NBER ID: w9197
Authors: Stephen E. Snyder; William N. Evans
Abstract: There is widespread and longstanding agreement that life expectancy and income are positively correlated. However, it has proven much more difficult to establish a causal relationship since income and health are jointly determined. We use a major change in the Social Security law as exogenous variation in income to examine the impact of income on mortality in an elderly population. The legislation created a notch' in Social Security benefits based upon date of birth; those born before January 1, 1917 generally receive higher benefits than those born afterwards. We compare mortality rates after age 65 for males born in the second half of 1916 and the first half of 1917. Data from restricted-use versions of the National Mortality Detail File combined with Census data allows us to count all deaths among elderly Americans between 1979 and 1993. We find that the higher income group has a statistically significantly higher mortality rate, contradicting the previous literature. We also find that the younger cohort responded to lower incomes by increasing post-retirement work effort. These results suggest that moderate employment has beneficial health effects for the elderly.
Keywords: No keywords provided
JEL Codes: I12; H55; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Income from social security benefits (H55) | Mortality rates among the elderly (I12) |
| Higher income (D31) | Higher mortality rates (I12) |
| Employment among younger cohort (J21) | Mitigation of adverse health effects (I14) |
| Income from social security benefits (H55) | Cohort-specific mortality differences (C41) |