Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2010:12: Why a positive link between age and income-related health inequality?

Martin Nordin () and Ulf-G Gerdtham ()
Additional contact information
Martin Nordin: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Ulf-G Gerdtham: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: This study uses Swedish data to analyze why the SES-health gradient increases with ageing. Since different measures of SES and health capture different aspects, we use this information to explore the age increase in health inequality and to discriminate between three types of explanations, namely: i) age increase in the causal SES effect; ii) reversed health effect on SES, and iii) lifecycle variation in the measurement errors in SES and health. Thus, our analysis points in the direction that the age increase in health inequality is primarily caused by a reversed causality going from health to annual income, and the probable mechanism is health affecting the labour supply of the individual. In addition the study report that the age variation in health inequality seem to have increased over time, and during the 1980th the age variation was rather limited. The evidence in our study is not conclusive, but all evidence documented agrees and supports this conclusion.

Keywords: health inequality; socioeconomic status; income; education

JEL-codes: D30; D31; I10; I12

29 pages, September 29, 2010

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