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.
The hypothesis that active community involvement is beneficial for health finds strong support in the medical literature and in most policy guidelines for active ageing in OECD countries. We test it empirically and find that voluntary work has a significant impact on several measures of mental wellbeing. When accounting for fixed effects, panel attrition, endogeneity, and reverse causality, the positive effect of voluntary work remains robust. For the first time in the literature, we calculate the monetary equivalent of mental wellbeing benefits of voluntary work with the compensating variation approach, and estimate them up to a maximum of around 9,500 euros per indicator. Our results imply that policies fostering voluntary work of the elderly would contribute to active ageing and the wellbeing of the elderly and reduce welfare costs for society.
Measuring Individual Economic Well‐Being and Social Welfare within the Framework of the System of National AccountsDecember 18, 2017
While the agenda of “beyond GDP” encompasses measurements that lie outside boundaries of the System of National Accounts, key aspects of individual well‐being and social welfare can be incorporated into an SNA framework. We bring together the relevant theoretical literature and the empirical tools needed for this purpose. We show how consumption‐based measures of economic welfare can be integrated into the national accounts without changing their production or asset boundary. At the same time, explicit normative and methodological choices are required to select a social welfare function. The paper provides guidance how to make these choices transparent and how to present social welfare measures.
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.
In the over 25 years since Jorgenson and Fraumeni (1989) published their first article integrating human capital measures with the national accounts, the Bureau of Economic Analysis’s (BEA’s) U.S. National Income and Product Accounts (NIPAs) and U.S demographics have changed significantly. The original paper is a national income accounting paper with production and factor outlay, income, receipt and expenditure, capital accumulation, and wealth accounts in current and constant prices. In this paper, we update the Jorgenson‐Fraumeni human capital estimates and integrate them into the latest NIPA accounts. A comparison of the aggregates for the U.S. and their trends between the earlier 1949–19 period and later 1998–2009 period is informative. The benefit from integrating human capital components into BEA’s NIPA over a long historical time period allows us to quantify the impact of the end to the gains in average educational attainment, changes in female labor force participation, and the possible impact of the greying of America.
The association between occupational status and health has been taken to reveal the presence of health inequalities shaped by occupational status. However, that interpretation assumes no influence of health status in explaining occupational standing. This paper documents evidence of non-negligible returns to occupation status on health (which we refer as ‘healthy worker effect’). We use a unique empirical strategy that addressed reverse causality, namely an instrumental variable strategy using the variation in average health in the migrant’s country of origin, a health measure plausibly not determined by the migrant’s occupational status. Our findings suggest that health status exerts significant effects on occupational status in several dimensions; having a supervising role, worker autonomy, and worker influence. The effect size of health is larger than that of an upper secondary education.
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.