Map of life expectancy at birth from Global Education Project.

Tuesday, April 26, 2016

Chetty, et al, on income and life expectancy . . .

in the U.S. is all the buzz, so I reckon I should say something about it.

It has long been known, and observed very consistently in various countries, that there is a relationship between people's socioeconomic status (SES) and longevity. SES can be measured in various ways, and it still holds -- income, education, occupational status (i.e. position in the hierarchy), wealth, membership in relatively advantaged groups such as white vs. black. Of course these are all correlated, but each of them tends to hold even when controlling for the others.

Chetty and colleagues used income tax data from the IRS matched with death records from the Social Security Administration. They estimated life expectancy at 40 years, controlling for race/ethnicity, and looked at gender and area of the country as covariates.

The main news in this is:

  • Life expectancy increases with income continuously throughout the income distribution. The richer you get, the longer you live, right up to the good old 1%. The difference in life expectancy at 40 between the lowest and highest 1% for men was 14.6 years. It was 10.1 years for women.
  • The impact on life expectancy of being poor was different in different parts of the country. 
  • Inequality in life expectancy increased from 2011-2014, with the lowest 5% gaining almost nothing, particularly for women.
  • Regional characteristics associated with lower life expectancy in the lowest 25% included the prevalence of behaviors such as smoking, but not access to medical care or labor market conditions. Regional characteristics favorable to life expectancy for low-income people were the fraction of immigrants (take that, Donald), fraction of college graduates, and government expenditures (take that, Mr. Cruz).

In making sense of this all it's important to keep a few technical points in mind. In order to have a life expectancy at 40, you have to make it that far. This isn't telling us anything about mortality at younger ages. Of course you can't do anything about mortality of infants and children, because they're largely dependent on their parents' income, so that's pretty much a separate question. "Life expectancy" assumes that people will continue to die at the same rates as others with their particular characteristics do today, as they go through the future life course. Obviously that isn't true. This is telling us what will happen if the world does not change. Also, controlling for race/ethnicity reduces the apparent effect of income -- it's actually greater. There are some other technical caveats and limitations, but these I think are the most important.

The main takeaway, for me, is one more brick in the wall of solid knowledge that spending all this money on medical care is not the answer to our lousy health compared with other wealthy (and some not-so-wealthy) countries. We could spend less on medical care and a lot of other social expenditures if we would a) tax the rich and b) invest in our people. The only reason that is the opposite of the conventional wisdom is because rich people buy the conventional wisdom.

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