The socioeconomic health gradient across the life cycle: what role for selective mortality and institutionalization?

Several studies have documented the now fairly stylized fact that health inequalities by income differ across the age distribution: in cross-sections the health gap between rich and poor tends to widen until about age 50 and then declines at higher ages. It has been suggested that selective mortality and institutionalization could be important factors driving the convergence at higher ages. We use eight waves of a health survey linked to four registries (on mortality, hospitalizations, (municipal) residence status and taxable incomes) to test this hypothesis. We construct life cycle profiles of health for birth year/gender/income groups from the health surveys (based on 128,689 observations) and exploit the registries to obtain precise estimates of individual probabilities of mortality and institutionalization using a seven year observation period for 2,521,122 individuals. We generate selection corrected health profiles using an inverse probability weighting procedure and find that attrition is indeed not random: older, poorer and unhealthier individuals are significantly more likely not to survive the next year and to be admitted to an institution. While these selection effects are very significant, they are not very large. We therefore reject the hypothesis that selective dropout is an important determinant of the differential health trajectories by income over the life course in the Netherlands.