|Title||A Slippery Slope: Essays on Income, Wealth, and the Health Gradient|
|Year of Publication||2005|
|University||The University of Wisconsin - Madison|
|Keywords||Health Conditions and Status, Income, Net Worth and Assets|
The relationship between health and socioeconomic status (SES), often called the health gradient, is a complex and perplexing research puzzle. Individuals with higher incomes tend to be healthier (although at a declining rate with higher income), yet it is unclear why this is so. Here, I argue that wealth and savings, largely neglected in past empirical work, provide important insights into the health-SES relationship. An empirical model in which income and wealth are transformed using the inverse hyperbolic sine is shown to capture important variations in health throughout the income and wealth distributions for U.S. working-age adults. The three-dimensional gradient in income, wealth, and health illustrates two patterns that are investigated in the following chapters: the predominance of poor health among those with little savings, and variations in health disparities by wealth over the life cycle. Panel data from the Health and Retirement Study are used to investigate a likely mode through which wealth may have a causal effect on health among the poor: through financial constraints that limit access to health care at the time of illness. I capitalize on recent research suggesting that income and wealth do not cause the onset of certain acute illnesses, conditional on past health. Viewing unexpected costs associated with such illnesses as financial shocks, I find that approximately one quarter of the population that experiences a stroke, cancer, heart problem, or high blood pressure has insufficient liquid assets to cover typical costs of unexpected medical care. Furthermore, this study suggests that a causal relationship between lack of savings and health recovery is plausible, possibly contributing to the steep slope of the gradient about zero. In the final chapter, I test a number of hypotheses that could account for the observed life cycle pattern of declining socioeconomic disparities in health in old age. I find that poor measurement of financial resources and possible cohort, Medicare, or retirement effects, but not attrition, are likely contributors to this phenomenon. Taking into account life-cycle patterns of income receipt and wealth decumulation, I find a large health gradient in wealth among the oldest old.
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|Short Title||A Slippery Slope: Essays on Income, Wealth, and the Health Gradient|