The impact of economic conditions on the disablement process: A Markov transition approach using SHARE data

A growing number of studies underline the relationship between socioeconomic status and health at older ages. Following that literature, we explore the impact of economic conditions on changes in functional health overtime. Frailty, a state of physiological instability, has been identified in the public health literature as a candidate for disability prevention but received little attention from health economists. Using SHARE panel data, respondents aged 50 and over from ten European countries were categorised as robust, frail and dependent. The determinants of health states' changes between two interviews were analysed using multinomial Probit models accounting for potential sample attrition. A particular focus was made on initial socioeconomic status, proxied by three alternative measures. Concentration indices were computed for key transition probabilities. Across Europe, poorer and less educated elders were substantially more likely to experience health degradations and also less likely to experience health improvements. The economic gradient for the recovery from frailty was steeper than that of frailty onset, but remained lower than that of dependency onset. The existing social programs in favour of deprived and dependent elders could be widened to those diagnosed as frail to reduce the onset of dependency and economic inequalities in health at older ages.