Average Earnings and Long-Term Mortality: Evidence from Administrative Data

Area of Science:

• Socioeconomic Determinants of Health
• Biostatistics
• Public Health Policy

Background:

• The association between socioeconomic status and health outcomes, particularly mortality, is well-documented.
• Existing research often relies on single-year earnings data, potentially underestimating the true relationship.

Purpose of the Study:

• To investigate the detailed nature of the correlation between earnings and mortality using longitudinal data.
• To assess the impact of earnings volatility and lagged earnings on mortality risk.

Main Methods:

• Utilized a unique database merging longitudinal earnings data of Pennsylvania workers with national death records.
• Analyzed the predictive power of average earnings over a six-year period versus single-year earnings.
• Examined the lag structure of earnings-mortality relationship and the impact of earnings volatility.

Main Results:

• Estimates based on single-year earnings data substantially understate the income-mortality association.
• A six-year average of earnings predicts a 70% greater impact on mortality compared to single-year earnings.
• Greater earnings volatility is associated with higher mortality, independent of mean earnings levels.

Conclusions:

• The relationship between earnings and mortality is more complex than suggested by single-year analyses.
• Lagged earnings show little correlation with current mortality, challenging "buying health" and unobserved trait theories.
• A more sophisticated theoretical framework is needed to fully explain the observed earnings-mortality patterns.