Moderate Shocks to Wealth and Health: Estimates of Their Impact on the Mortality of Elderly

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In Chapter One, we examine evidence for a causal connection between income and mortality. 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. 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 higher mortality rate, contradicting the previous literature. We also found 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.

In Chapter Two, we examine another potential determinant of mortality among the elderly, pre-natal shocks to the mother's health. D.J.P. Barker has presented epidemiologic evidence that maternal health status affects the later-life mortality of children. We use the 1918 influenza epidemic as a health shock which is orthogonal to chronic health status. Our findings are that the influenza-exposed cohorts do not experience significantly higher mortality. This allows us to bound any Barker effect of the epidemic as raising mortality less than ten percent.