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"Healthy, wealthy, and wise?" revisited: An analysis of the causal pathways from socio-economic status to health

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  • Stowasser, Till
  • Heiss, Florian
  • McFadden, Daniel
  • Winter, Joachim

Abstract

Much has been said about the stylized fact that the economically successful are not only wealthier but also healthier than the less affluent. There is little doubt about the existence of this socio-economic gradient in health, but there remains a vivid debate about its source. In this paper, we review the methodological challenges involved in testing the causal relationships between socio-economic status and health. We describe the approach of testing for the absence of causal channels developed by Adams et al. (2003) that seeks identification without the need to isolate exogenous variation in economic variables, and we repeat their analysis using the full range of data that have become available in the Health and Retirement Study since, both in terms of observations years and age ranges covered. This analysis shows that causal inference critically depends on which time periods are used for estimation. Using the information of longer panels has the greatest effect on results. We find that SES causality cannot be ruled out for a larger number of health conditions than in the original study. An approach based on a reduced-form interpretation of causality thus is not very informative, at least as long as the confounding influence of hidden common factors is not fully controlled.

Suggested Citation

  • Stowasser, Till & Heiss, Florian & McFadden, Daniel & Winter, Joachim, 2014. ""Healthy, wealthy, and wise?" revisited: An analysis of the causal pathways from socio-economic status to health," Discussion Papers in Economics 20846, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenec:20846
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    References listed on IDEAS

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    1. Peter Adams & Michael D. Hurd & Daniel L. McFadden & Angela Merrill & Tiago Ribeiro, 2004. "Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Status," NBER Chapters, in: Perspectives on the Economics of Aging, pages 415-526, National Bureau of Economic Research, Inc.
    2. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    3. Adda, Jerome & Chandola, Tarani & Marmot, Michael, 2003. "Socio-economic status and health: causality and pathways," Journal of Econometrics, Elsevier, vol. 112(1), pages 57-63, January.
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    Citations

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    Cited by:

    1. Guner, Nezih & Kulikova, Yuliya & Llull, Joan, 2018. "Marriage and health: Selection, protection, and assortative mating," European Economic Review, Elsevier, vol. 104(C), pages 138-166.
    2. Nezih Guner & Yuliya Kulikova & Joan Llull, 2014. "Does Marriage Make You Healthier?," Working Papers 795, Barcelona Graduate School of Economics.
    3. Rasmus Hoffmann & Hannes Kröger & Siegfried Geyer, 2019. "Social Causation Versus Health Selection in the Life Course: Does Their Relative Importance Differ by Dimension of SES?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(3), pages 1341-1367, February.
    4. Cornelius A. Rietveld & Hans van Kippersluis & A. Roy Thurik, 2015. "Self‐Employment and Health: Barriers or Benefits?," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1302-1313, October.
    5. Arrighi, Y. & Rapp, T. & Sirven, N., 2017. "The impact of economic conditions on the disablement process: A Markov transition approach using SHARE data," Health Policy, Elsevier, vol. 121(7), pages 778-785.
    6. Schwandt, Hannes, 2014. "Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations," IZA Discussion Papers 8298, Institute of Labor Economics (IZA).
    7. Till Stowasser & Florian Heiss & Daniel McFadden & Joachim Winter, 2014. "Understanding the SES Gradient in Health Among the Elderly: The Role of Childhood Circumstances," NBER Chapters, in: Discoveries in the Economics of Aging, pages 187-219, National Bureau of Economic Research, Inc.
    8. Giorgio Brunello & Margherita Fort & Nicole Schneeweis & Rudolf Winter‐Ebmer, 2016. "The Causal Effect of Education on Health: What is the Role of Health Behaviors?," Health Economics, John Wiley & Sons, Ltd., vol. 25(3), pages 314-336, March.
    9. Chen, Xi & Wang, Tianyu & Busch, Susan H., 2019. "Does money relieve depression? Evidence from social pension expansions in China," Social Science & Medicine, Elsevier, vol. 220(C), pages 411-420.
    10. Brunello, Giorgio & Fort, Margherita & Schneeweis, Nicole & Winter-Ebmer, Rudolf, 2011. "The Causal Effect of Education on Health," Economics Series 280, Institute for Advanced Studies.
    11. Anne Nolan & Richard Layte, 2014. "Socio-economic Inequalities in Child Health in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 25-64.
    12. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    13. Guner, Nezih & Kulikova, Yuliya & Llull, Joan, 2018. "Reprint of: Marriage and health: Selection, protection, and assortative mating," European Economic Review, Elsevier, vol. 109(C), pages 162-190.
    14. Benedetta Pongiglione & Bianca L De Stavola & George B Ploubidis, 2015. "A Systematic Literature Review of Studies Analyzing Inequalities in Health Expectancy among the Older Population," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-21, June.
    15. Belfield, Clive R. & Kelly, Inas Rashad, 2013. "Early education and health outcomes of a 2001 U.S. Birth Cohort," Economics & Human Biology, Elsevier, vol. 11(3), pages 310-325.
    16. Lenka Benova & Emily Grundy & George B. Ploubidis, 2015. "Socioeconomic Position and Health-Seeking Behavior for Hearing Loss Among Older Adults in England," Journals of Gerontology: Series B, Gerontological Society of America, vol. 70(3), pages 443-452.
    17. Green, Tiffany L., 2014. "Examining the temporal relationships between childhood obesity and asthma," Economics & Human Biology, Elsevier, vol. 14(C), pages 92-102.
    18. Bartolucci, Francesco & Belotti, Federico & Peracchi, Franco, 2015. "Testing for time-invariant unobserved heterogeneity in generalized linear models for panel data," Journal of Econometrics, Elsevier, vol. 184(1), pages 111-123.
    19. Kaushal, Neeraj & Wang, Julia Shu-Huah & Huang, Xiaoning, 2018. "State dream acts and education, health and mental health of Mexican young adults in the U.S," Economics & Human Biology, Elsevier, vol. 31(C), pages 138-149.
    20. Hoffmann, Rasmus & Kröger, Hannes & Pakpahan, Eduwin, 2018. "Pathways between socioeconomic status and health: Does health selection or social causation dominate in Europe?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 23-36.
    21. Hoffmann, Rasmus & Kröger, Hannes & Geyer, Siegfried, 2019. "Social Causation Versus Health Selection in the Life Course: Does Their Relative Importance Differ by Dimension of SES?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1341-1367.
    22. Iris Feinberg & Jan Frijters & Vicki Johnson-Lawrence & Daphne Greenberg & Elena Nightingale & Chelsea Moodie, 2016. "Examining Associations between Health Information Seeking Behavior and Adult Education Status in the U.S.: An Analysis of the 2012 PIAAC Data," PLOS ONE, Public Library of Science, vol. 11(2), pages 1-20, February.
    23. Lenka Benova & Oona M R Campbell & George B Ploubidis, 2014. "Socio-Economic Gradients in Maternal and Child Health-Seeking Behaviours in Egypt: Systematic Literature Review and Evidence Synthesis," PLOS ONE, Public Library of Science, vol. 9(3), pages 1-12, March.

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    More about this item

    Keywords

    health; wealth; socio-economic gradient; causal inference; Granger causality; individual heterogeneity;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I0 - Health, Education, and Welfare - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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