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The Impact of Income on Mortality: Evidence from the Social Security Notch

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  • 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.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9197.

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Date of creation: Sep 2002
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Publication status: published as Snyder, Stephen E. and William N. Evans. "The Effect Of Income On Mortality: Evidence From The Social Security Notch," Review of Economics and Statistics, 2006, v88(3,Aug), 482-495.
Handle: RePEc:nbr:nberwo:9197

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Cited by:
  1. Ruhm, Christopher J., 2003. "Healthy Living in Hard Times," IZA Discussion Papers 711, Institute for the Study of Labor (IZA).
  2. Antoine Bommier & Thierry Magnac & Benoît Rapoport & Muriel Roger, 2005. "Droits à la retraite et mortalité différentielle," Économie et Prévision, Programme National Persée, Programme National Persée, vol. 168(2), pages 1-16.
  3. Lindahl, Mikael, 2002. "Estimating the Effect of Income on Health and Mortality Using Lottery Prizes as Exogenous of Variation in Income," IZA Discussion Papers 442, Institute for the Study of Labor (IZA).
  4. David M. Cutler & Adriana Lleras-Muney & Tom Vogl, 2008. "Socioeconomic Status and Health: Dimensions and Mechanisms," NBER Working Papers 14333, National Bureau of Economic Research, Inc.
  5. Mari Rege, Kjetil Telle & Mark Votruba, 2005. "The Effect of Plant Downsizing on Disability Pension Utilization," Discussion Papers, Research Department of Statistics Norway 435, Research Department of Statistics Norway.
  6. John R. Moran & Kosali Ilayperuma Simon, 2004. "Income and the Use of Prescription Drugs by the Elderly: Evidence from the Notch Cohorts," Center for Policy Research Working Papers, Center for Policy Research, Maxwell School, Syracuse University 66, Center for Policy Research, Maxwell School, Syracuse University.
  7. Gary V. Engelhardt & Jonathan Gruber, 2004. "Social Security and the Evolution of Elderly Poverty," NBER Working Papers 10466, National Bureau of Economic Research, Inc.
  8. Rajeev Dehejia & Adriana LLeras Muney, 2004. "Booms, Busts, and Babies' Health," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(3), pages 1091-1130, August.
  9. Ulf-G. Gerdtham & Christopher J. Ruhm, 2002. "Deaths Rise in Good Economic Times: Evidence From the OECD," NBER Working Papers 9357, National Bureau of Economic Research, Inc.
  10. Ruhm, Christopher J., 2003. "Good times make you sick," Journal of Health Economics, Elsevier, Elsevier, vol. 22(4), pages 637-658, July.
  11. Rajeev Dehejia & Adriana Lleras-Muney, 2003. "The Timing of Births: Is the Health of Infants Counter-Cyclical?," NBER Working Papers 10122, National Bureau of Economic Research, Inc.
  12. Andreea Balan-Cohen, 2008. "Healthy, Wealthy, and Wise? The Impact of the Old Age Assistance Program on Elderly Mortality in the United States," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 0719, Department of Economics, Tufts University.

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