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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
9197.
Length: Date of creation: Sep 2002 Date of revision: Handle: RePEc:nbr:nberwo:9197
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Find related papers by JEL classification: I12 - Health, Education, and Welfare - - Health - - - Health Production H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Michael D. Hurd & Daniel McFadden & Angela Merrill, 2001.
"Predictors of Mortality among the Elderly,"
NBER Chapters,
in: Themes in the Economics of Aging, pages 171-198
National Bureau of Economic Research, Inc.
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