Intergenerational Health Mobility in the US

February 14, 2018

Studies of intergenerational mobility have largely ignored health despite the central importance of health to welfare. We present the first estimates of intergenerational health mobility in the US by using repeated measures of self-reported health status (SRH) during adulthood from the PSID. Our main finding is that there is substantially greater health mobility than income mobility in the US. A possible explanation is that social institutions and policies are more effective at disrupting intergenerational health transmission than income transmission. We further show that health and income each capture a distinct dimension of social mobility. We also characterize heterogeneity in health mobility by child gender, parent gender, race, education, geography and health insurance coverage in childhood. We find some important differences in the patterns of health mobility compared with income mobility and also find some evidence that there has been a notable decline in health mobility for more recent cohorts. We use a rich set of background characteristics to highlight potential mechanisms leading to intergenerational health persistence.

via Intergenerational Health Mobility in the US by Timothy Halliday, Bhashkar Mazumder, Ashley Wong :: SSRN

Misperceiving Inequality

February 14, 2018

A vast literature suggests that economic inequality has important consequences for politics and public policy. Higher inequality is thought to increase demand for income redistribution in democracies and to discourage democratization and promote class conflict and revolution in dictatorships. Most such arguments crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution. Using a variety of large, cross‐national surveys, we show that, in recent years, ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions emerge robustly, regardless of data source, operationalization, and measurement method. Moreover, perceived inequality—not the actual level—correlates strongly with demand for redistribution and reported conflict between rich and poor. We suggest that most theories about political effects of inequality need to be reframed as theories about effects of perceived inequality.

via Misperceiving Inequality by Vladimir Gimpelson, Daniel Treisman :: SSRN

Health Inequality of Opportunity: A Non-Parametric Approach Analysis

February 2, 2018

The objective of this research is to measure and compare the importance of the contribution of inequality of opportunity in child health inequality. The latter is decomposed into within opportunity inequality and the between opportunity inequality using a non-parametric approach after building groups with deducted circumstance variables.

The results showed that the total health inequality experienced a decrease between 1998 and 2013 from 0.65 to 0.26 in 15 years unlike the inequality of opportunities which has increased. It goes from 0.14 to 0.18 respectively in 1998 and 2013. The relatively low levels of inequality of opportunity are interpreted as an estimate of the lower bound of the set of variables of circumstances that can influence child health. Considering the results, the increase in the level of inequality of health opportunity would come more from the increase of the “unfavorable opportunity” group’s contribution.

via Health Inequality of Opportunity: A Non-Parametric Approach Analysis by Yacobou Sanoussi :: SSRN

New state-level estimates of the economic burden of the opioid epidemic

January 17, 2018

Opioid abuse rates and deaths vary considerably from state to state, as do the costs associated with this epidemic. But researchers have generally focused on the economic impact of the crisis in the aggregate, at the US level. In a new analysis, I estimate the cost at the state level and find substantial variation across the country. Here, I offer a preview of my findings, which will be released in full next month.

via New state-level estimates of the economic burden of the opioid epidemic – AEI

Measuring and Modeling Intergenerational Links in Relation to Long‐Term Care

January 10, 2018

Long‐term care has profound intergenerational implications. It can be costly for those who need it and onerous for loved ones who provide it. We pinpoint three intergenerational aspects of long‐term care that require further research. One concerns the link between costs of private care and intergenerational wealth transfers. The second concerns the link between participation in care and the work and welfare of family providers. The third relates to intergenerational tensions that these and other late‐in‐life interactions create. We outline innovations in modeling and measurement that would improve understanding of intergenerational linkages and their implementation in appropriate panel data.

via Measuring and Modeling Intergenerational Links in Relation to Long‐Term Care by Andrew Caplin, Kathleen McGarry, Mi Luo :: SSRN

A Consistent Data Series to Evaluate Growth and Inequality in the National Accounts

December 18, 2017

Recent headlines frequently refer to rising inequality and its implication on economic growth and social welfare. Addressing the latter is difficult and requires more than simply looking at GDP, as Kuznets long ago pointed out. In this paper we focus on the importance of the income measure underlying the inequality measure when examining the relationship between GDP growth and inequality. We create a mapping using Census Bureau household survey data and Bureau of Labor Statistics (BLS) consumer expenditure data to create distributional measures of the Bureau of Economic Analysis (BEA) personal income. We show that for the period 2000‐2012, inequality using personal income is substantively lower than inequality measured using Census Bureau money income, and the trends in both inequality and median income are different. This demonstrates the importance of using a measure a national accounts based measure of income when examining the relationships between inequality and growth.

via A Consistent Data Series to Evaluate Growth and Inequality in the National Accounts by Dennis Fixler, David Johnson, Andrew Craig, Kevin Furlong :: SSRN

The Rising Longevity Gap by Lifetime Earnings – Distributional Implications for the Pension System

December 18, 2017

This study uses German social security records to provide novel evidence about the heterogeneity in life expectancy by lifetime earnings and, additionally, documents the distributional implications of this earnings-related heterogeneity. We find a strong association between lifetime earnings and life expectancy at age 65 and show that the longevity gap is increasing across cohorts. For West German men born 1926-28, the longevity gap between top and bottom decile amounts to about 4 years (about 30%). This gap increases to 7 years (almost 50%) for cohorts 1947-49. We extend our analysis to the household context and show that lifetime earnings are also related to the life expectancy of the spouse. The heterogeneity in life expectancy has sizable and relevant distributional consequences for the pension system: when accounting for heterogeneous life expectancy, we find that the German pension system is regressive despite a strong contributory link. We show that the internal rate of return of the pension system increases with lifetime earnings. Finally, we document an increase of the regressive structure across cohorts, which is consistent with the increasing longevity gap.

via The Rising Longevity Gap by Lifetime Earnings – Distributional Implications for the Pension System by Peter Haan, Daniel Kemptner, Holger Lüthen :: SSRN