Healthier over time? Period effects in health among older Europeans in a step-wise approach to identification

We examine changes in the level of physical health using longitudinal data on people aged 50+ from nine European countries covering the years from 2004 to 2017. For this purpose we develop a novel approach to identify age, period and cohort effects, which, in contrast to methods relying on mechanical restrictions, uses a step-wise estimation combining information on physical health with data on cognitive abilities. The approach relies on two important assumptions. First, we estimate relative differences between cohorts in cognitive abilities assuming that only age and cohort effects are responsible for their evolution. We then use the estimated proportional cohort differences to restrict the differences between cohorts in health development. The method is applied to the dynamics of four measures of poor health: weak grip strength, limitations in mobility, in activities of daily living (ADL) and in instrumental activities of daily living (IADL). Our results suggest insignificant or adverse period effects for the evolution of physical health. For example, the difference in likelihood of poor health as measured through weak grip strength between 2004 and 2017 is 2.1 percentage points, p.p., (95% CI -4.3, 8.4), and the corresponding numbers for the other three measures are respectively: 2.0 p.p. (CI -1.6, 5.6); 2.2 p.p. (CI -0.2, 4.7) and 3.0 p.p. (CI 0.3, 5.8). These estimates, which reflect the implications of time over the period of 14 years, are relatively low, but they highlight the surprising fact that any improvements in health in the examined period have been driven essentially by cohort effects. Our evidence is consistent with some earlier studies and sheds new light on recent (pre-pandemic) trends in life expectancy. It also raises questions concerning efficacy of healthcare and equal access to high quality care - the factors one would consider as important determinants of period effects in health.