Health Policy and the Distribution of Lifetime Income

Abstract

A number of health policies have implications for, and in turn can be influenced by, the distribution of income. However, current discussions define the distribution in current, not lifetime, income. This study describes a method of estimating gender and race differences in the distribution of lifetime incomes that account for mortality differences. When cohort lifetime incomes of living and deceased persons are compared, black men are found to be much worse off, whereas white women are found to be better off than existing estimates using annual income suggest. The mortality and lifetime income advantage of white women, however, is offset if, as some argue, white women have higher morbidity rates than white men of the same age. The authors use the concept of lifetime income to draw implications for health policy debates on cigarette and beer taxes, occupational safety and health, Medicaid versus Medicare spending, educational health promotion programs, and general investments in education.