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Unraveling the SES-Health Connection

  • James P. Smith

    (RAND Corporation)

While a debate rages on about competing reasons why SES may affect health, there is little recognition that the so-called reverse causation from health to economic status may be pretty fundamental as well. Even if the direction of causation is that SES mainly affects health, what dimensions of SES actually matter—the financial aspects such as income or wealth or non-financial dimensions like education? Finally, is there a life course component to the health gradient so that we may be mislead in trying to answer these questions by only looking at people of a certain age—say those past 50. This paper, which is divided into four sections, provides my answers to these questions. The first section examines the issue of reverse causation or whether a new health event has a significant impact on four dimensions of SES—out-of-pocket medical expenses, labor supply, household income, and household wealth. The next section switches the perspective by asking whether the so-called direct causation from SES to health really matters all that much. If the answer is yes and it will be, a sub-theme in this section concerns which dimensions of SES—income, wealth, or education—matter for individual health. Since the answer to that question turns out to be education, Section 3 deals with the very much more difficult issue of why education matters so much. The evidence in these first three sections relies on data for people above age 50. In the final section of the paper, I test the robustness of my answers to these basic questions of the meaning of the SES-health gradient using data that span the entire life-course.

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File URL: http://econwpa.repec.org/eps/lab/papers/0505/0505018.pdf
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Paper provided by EconWPA in its series Labor and Demography with number 0505018.

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Length: 25 pages
Date of creation: 19 May 2005
Date of revision:
Handle: RePEc:wpa:wuwpla:0505018
Note: Type of Document - pdf; pages: 25. Published in Aging, Health, and Public Policy: Demographic and Economic Perspectives, a supplement to Population and Development Review, Volume 30, New York: Population Council, 2005.
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Anne Case & Angela Fertig & Christina Paxson, 2004. "The Lasting Impact of Childhood Health and Circumstance," Working Papers 246, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  2. Anne Case & Darren Lubotsky & Christina Paxson, 2002. "Economic status and health in childhood: the origins of the gradient," Working Papers 262, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  3. Adams, Peter & Hurd, Michael D. & McFadden, Daniel & Merrill, Angela & Ribeiro, Tiago, 2003. "Healthy, wealthy, and wise? Tests for direct causal paths between health and socioeconomic status," Journal of Econometrics, Elsevier, vol. 112(1), pages 3-56, January.
  4. Anne C. Case & Angus Deaton, 2003. "Broken Down by Work and Sex: How Our Health Declines," NBER Working Papers 9821, National Bureau of Economic Research, Inc.
  5. Smith, J-P & Kington, R, 1997. "Demographic and Economic Correlates of Health in Old Age," Papers 97-06, RAND - Reprint Series.
  6. James P. Smith, 2004. "Why is Wealth Inequality Rising?," Macroeconomics 0402012, EconWPA.
  7. James P. Smith, 2003. "Consequences and predictors of new health events," IFS Working Papers W03/22, Institute for Fiscal Studies.
  8. Dana P. Goldman & James P. Smith, 2004. "Can Patient Self-Management Help Explain the SES Health Gradient?," HEW 0403004, EconWPA.
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