SOCIAL SECURITY INCOME AND ELDERLY MORTALITY Cristian Meghea, PhD Research Department American College of Radiology, Reston, VA AcademyHealth Annual Research Meeting Seattle, June 2006 Pre-publication information. Please do not cite

1. Introduction Social Security reform: uncertainty of future retirement income Effects of changes in social insurance on elderly well-being? Previous studies: –Wealth improves health and lowers mortality –The effect weakens (disappears) at older ages

Wealth influences health (mortality). Also, reverse causality from health to wealth Difficult to separate the causal effect of wealth on health from the reversed effect of health on wealth This study: the causal effect of Social Security income on elderly mortality 2. Introduction

Natural experiment isolates the effect of income on mortality –Social Security spousal benefits of divorced women double if the ex passes away Divorced retired women: fastest growing aged group, highest poverty, understudied 3. This study…

New Beneficiary Data System (NBDS), from the Social Security Administration Wave 1: 1982 interview of “new beneficiaries” Wave 2: 1991 follow-up interview of initial respondents Matched Social Security administrative records 4. Social Security Admin. data

Dependent variable: ten-year mortality (1 if deceased in ten years, 0 otherwise) I.V.: Instrumental variable estimation –All divorced women: instrument for the benefits using the death of the ex-husband Treatment-control estimation –Divorced women receiving spousal benefits; ex-spouse deceased vs. ex-spouse alive 5. Method: I.V. and treatment effect

(Marginal effects and SE) All elderly Social Security income (0.001) Total assets (0.002) Education (0.001) White (vs. non-white)0.003 (0.014) Age0.015 (0.002) Male (vs. female)0.129 (0.011) Number of health problems0.021 (0.003) 6. Correlation income-mortality All elderly: Probability(ten-year mortality)

(Marginal effects and SE) No IVIV Social Security income0.006 (0.010) (0.025) Total assets (0.019) (0.019) Education (0.006) White (vs. non-white)0.113 (0.045)0.130 (0.044) Age0.012 (0.007)0.018 (0.008) Number of health problems0.017 (0.011)0.016 (0.011) 7. Instrumental Variables All divorced women: Probability(ten-year mortality)

Instrumental variable, all elderly divorced women: no effect of income on mortality Other explanatory variables: –White, older, worse health: higher mortality 8. No effect of income on mortality

(Marginal effects and SE) “Treatment” effect High-benefit group (0.048) Total assets0.001 (0.004) Education0.003 (0.008) White (vs. non-white)0.055 (0.054) Age0.019 (0.008) Number of health problems0.011 (0.011) Divorced women, spousal benefits: P(ten-year mortality) 9. Treatment/comparison analysis

Divorced women receiving Social Security spousal benefits: no effect of income on mortality Other explanatory variables: Older, worse health: higher mortality 10. No effect of income on mortality

All elderly: no correlation between income and mortality All elderly divorced women: no effect of income on mortality (IV technique) Elderly divorced women receiving spousal benefits: no effect of income on mortality (treatment effect technique) 11. Summary: income and mortality

Better socioeconomic status may improve health at younger ages: policies are effective If policies enhancing socioeconomic status come late in life: ineffective 12. Implications