Why a positive link between increasing age and income-related health inequality?

Martin Nordin,Ulf G Gerdtham

doi:10.5617/njhe.651

Abstract

This study analyze why the SES-health gradient increases with ageing. We use Statistics Sweden’s Survey of Living Conditions (the ULF). By comparing various SES and health outcome relationships we explore the age increase in health inequality and distinguish between three types of explanations, namely: i) age increase in the causal SES effect; ii) reversed health effect on SES, and iii) lifecycle variation in the measurement errors in SES. Thus, the study indicates that the age increase in health inequality is primarily caused by a reversed causality going from health to annual income, and the probable mechanism is health affecting the labour supply of the individual. The evidence in our study is not conclusive in that we can prove anything, but all the documented evidence supports this conclusion.

Highlights

Numerous studies report the existence of a persistent socioeconomic status (SES)-health gradient in every country, regardless of SES and most health outcome measures
If we assume that reverse causality does not affect the education-health relationship and that the measurement error in final education level is minor, we can draw the following conclusion: the age increase in health inequality is caused by reverse causality and/or lifecycle variation in the measurement error in current income
In the more empirically realistic case, where education and income are highly correlated, a specific causal mechanism for one of the SES indicators will show up for the other SES indicator as well, i.e. if there is a causal mechanism behind the age increase in the income effect, it will to some extent show up for education

Summary

Introduction

Numerous studies report the existence of a persistent socioeconomic status (SES)-health gradient in every country, regardless of SES and most health outcome measures (see for example; Baum and Ruhm, 2009; Buckley et al, 2004; Deaton and Paxton, 1998; Gerdtham and Johannesson 2000, 2002, 2004; Smith, 2004; van Doorslaer et al, 1997; Wagstaff and van Doorslaer, 2000; van Doorslaer and Koolman, 2004). Several studies have established that the unequal distribution of health among SES groups increases with age (Baum and Ruhm, 2009; Case and Deaton, 2005; Deaton and Paxton, 1998; Islam et al, 2010), and Cutler et al (2008) stress that one has to take the lifecycle into account when modelling causality of the SES-health gradient. This paper aims to expand knowledge in this area by exploring different types of explanations for a positive relationship between age and health inequality

Objectives

Discussion

Conclusion