SOCIAL SECURITY INCOME AND ELDERLY MORTALITY

Cristian Meghea, PhD (cristianm@acr.org)

Research Department

American College of Radiology, Reston, VA

AcademyHealth Annual Research Meeting

Seattle, June 2006

Pre-publication information. Please do not cite

1. Introduction

• Social Security reform: uncertainty of future retirement income

• Effects of changes in social insurance on elderly well-being?

• Previous studies:

– Wealth improves health and lowers mortality

– The effect weakens (disappears) at older ages

• Wealth influences health (mortality). Also, reverse causality from health to wealth

• Difficult to separate the causal effect of wealth on health from the reversed effect of health on wealth

• This study: the causal effect of Social Security income on elderly mortality

2. Introduction

• Natural experiment isolates the effect of income on mortality – Social Security spousal benefits of divorced

women double if the ex passes away

• Divorced retired women: fastest growing aged group, highest poverty, understudied

3. This study…

• New Beneficiary Data System (NBDS), from the

Social Security Administration

• Wave 1: 1982 interview of “new beneficiaries”

• Wave 2: 1991 follow-up interview of initial

respondents

• Matched Social Security administrative records

4. Social Security Admin. data

• Dependent variable: ten-year mortality (1 if deceased in ten years, 0 otherwise)

• I.V.: Instrumental variable estimation

– All divorced women: instrument for the benefits using the death of the ex-husband

• Treatment-control estimation

– Divorced women receiving spousal benefits; ex-spouse deceased vs. ex-spouse alive

5. Method: I.V. and treatment effect

(Marginal effects and SE) All elderly

Social Security income -0.0001 (0.001)

Total assets -0.004 (0.002)

Education -0.003 (0.001)

White (vs. non-white) 0.003 (0.014)

Age 0.015 (0.002)

Male (vs. female) 0.129 (0.011)

Number of health problems 0.021 (0.003)

6. Correlation income-mortality

All elderly: Probability(ten-year mortality)

(Marginal effects and SE) No IV IV

Social Security income 0.006 (0.010) -0.020 (0.025)

Total assets -0.020 (0.019) -0.016 (0.019)

Education -0.003 (0.006) -0.003(0.006)

White (vs. non-white) 0.113 (0.045) 0.130 (0.044)

Age 0.012 (0.007) 0.018 (0.008)

Number of health problems 0.017 (0.011) 0.016 (0.011)

7. Instrumental Variables

All divorced women: Probability(ten-year mortality)

• Instrumental variable, all elderly divorced women: no effect of income on mortality

• Other explanatory variables:– White, older, worse health: higher mortality

8. No effect of income on mortality

(Marginal effects and SE) “Treatment” effect

High-benefit group -0.052 (0.048)

Total assets 0.001 (0.004)

Education 0.003 (0.008)

White (vs. non-white) 0.055 (0.054)

Age 0.019 (0.008)

Number of health problems 0.011 (0.011)

Divorced women, spousal benefits: P(ten-year mortality)

9. Treatment/comparison analysis

• Divorced women receiving Social Security spousal benefits: no effect of income on mortality

• Other explanatory variables:

• Older, worse health: higher mortality

10. No effect of income on mortality

• All elderly: no correlation between income and mortality

• All elderly divorced women: no effect of income on mortality (IV technique)

• Elderly divorced women receiving spousal benefits: no effect of income on mortality (treatment effect technique)

11. Summary: income and mortality

• Better socioeconomic status may improve health at younger ages: policies are effective

• If policies enhancing socioeconomic status come late in life: ineffective

12. Implications