The Empirical Relationship between Lifetime Earnings and Mortality
Julian P. Cristia, Congressional Budget Office (CBO)
Researchers have aimed to estimate the extent of differential mortality across socioeconomic groups by classifying individuals using income in the previous year. The first problem with this strategy is reverse causation: the same health shocks that lead to increase morbidity also cause income to decline. Second, annual income is a noisy measure of permanent income. This paper aims to tackle these drawbacks by classifying individuals using measures of lifetime earnings. A unique data set constructed matching the Survey of Income and Program Participation to Social Security records on earnings and mortality is used. Results indicate that the gradient between mortality and lifetime earnings is strong, smaller for women, decreases with age and varies when own versus household earnings is used. Adjusting for race, marital status and education only slightly decreases the estimated differentials. Finally, there is evidence that differential mortality by lifetime earnings has increased in the last twenty years.