Age, Health, and Poverty Lecture 9 Today’s Readings Schiller Ch. 6: Age and Health DeParle, Ch. 7: Redefining Compassion: Washington, DeParle, Ch. 8: The Elusive President,

Today’s Topics Do we spend too much in public support for the elderly and not enough for children? Are there disparities in mortality and morbidity rates across minority groups? Does poor health cause poverty? Does poverty cause poor health?

unambiguous causality? Consider the poverty rates in 2005 for: – children under 18: 17.6% – persons 18 t0 64 years: 11.1% – persons 65 years and older: 10.1% What is the relationship between age and poverty? –Is poverty a determinant of age? Life expectancy? How? –Is age a determinant of the probability of being in poverty? How?

The War Between the Generations Schiller writes that, “The dramatic decline in poverty among the aged [since the 1960s] is cause for celebration.” It is one of our great policy accomplishments. Why then has the American public has turned this victory against poverty into a matter of social injustice, pitting the elderly against children rather than setting it up as a model to be replicated?

Federal Spending on the Elderly and Children Source: Congressional Budget Office, In fiscal year 2000, the federal government spent a little over one-third of its budget-- about $615 billion--on transfer payments and services for people age 65 or older. Federal spending on children in 2000 was a little less than 10 percent -- about $148 billion, or $175 billion if payments to the children's parents are included.

Federal Spending on the Elderly and Children Federal spending on the average person 65 or older was nearly $17,700 in 2000 compared to about $2,100 per child. –Entitlement programs account for the overwhelming share of spending on the elderly (97 percent in 2000) but a much smaller portion of spending on children (about 67 percent).

Federal Spending on the Elderly and Children –In 10 years (under current policies), spending on the elderly and children combined will account for more than half of total government spending, with the elderly's share making up roughly 80 percent of that amount.

Can we spend more on children without spending less on the elderly? The realities of budget constraints –Note that the pie charts on the following page do not illustrate the growth in the total expenditures: the pies are all the same size. Real GDP grew 308 percent between 1959 and –Source: Economic Report of the President, 2006,

Growing Share of Federal Expenditures Going to Income Security Source: US Census, Statistical Abstract of the United States (1997), Table 518 and (2000), Table 533.

GDP (trillions of 2000 dollars) YearReal GDP

Should we reduce of support for the elderly and increase our support for children? What kind of insights can we offer as economists? Let’s use cost/benefit analysis. –What are the likely benefits of reallocating transfers from the elderly to children? –What are the likely costs of doing the same?

Health Disparities across the American Population “Americans who are members of racial and ethnic minority groups, including blacks or African Americans, American Indians and Alaska Natives, Asian Americans, Hispanics or Latinos, and Other Pacific Islanders, are more likely than whites to have poor health and to die prematurely.” CDC,

Health Disparities, cont. African American women are more than twice as likely to die of cervical cancer than are white women and are more likely to die of breast cancer than are women of any other racial or ethnic group. In 2000, rates of death from diseases of the heart were 29 percent higher among African American adults than among white adults, and death rates from stroke were 40 percent higher.

Health Disparities, cont. American Indians and Alaska Natives were 2.6 times more likely to have diagnosed diabetes compared with non- Hispanic Whites, African Americans were 2.0 times more likely, and Hispanics were 1.9 times more likely.

Health Disparities, cont. HIV infection is the fifth leading cause of death for people who are years old in the United States, and is the leading cause of death for African- American men ages Although African Americans and Hispanics represented only 26 percent of the U.S. population in 2001, they accounted for 66 percent of adult AIDS cases and 82 percent of pediatric AIDS cases reported in the first half of that year. Source

Comparison of black and white death rates ( Cause of death Black mortality rates compared to whites Infant mortality100 percent higher Heart disease40 percent higher All cancers30 percent higher Prostate cancer100 percent higher HIV/AIDS600 percent higher Homicide500 percent higher

Estimated Life Expectancy at Birth in Years (source: YearSexWhiteBlack 2002Male Female Male Female Male Female

Infant mortality rates (the rate at which babies less than one year of age die) Infant mortality is used to compare the health and well-being of populations across and within countries. The leading causes of infant death include congenital abnormalities, pre-term/low birth weight, Sudden Infant Death Syndrome (SIDS), problems related to complications of pregnancy, and respiratory distress syndrome

Infant mortality rates, cont. The US infant mortality rate has continued to steadily decline over the past several decades, from 26.0 per 1,000 live births in 1960 to 6.9 per 1,000 live births in The United States ranked 28th in the world in infant mortality in 1998.

Infant mortality rates, cont. Infant mortality among African Americans in 2000 occurred at a rate of 14.1 deaths per 1,000 live births, twice the national average. The black-to-white ratio in infant mortality was 2.5 (up from 2.4 in 1998). This widening disparity between black and white infants is a trend that has persisted over the last two decades. Source: CDC, “Eliminate Disparities in Infant Mortality”

Infant mortality rates, cont. SIDS deaths among American Indian and Alaska Natives is 2.3 times the rate for non-Hispanic white mothers

Why do Minorities have higher morbidity and mortality rates? Minorities –have less access to, and availability of, health services including mental health services. (See –are less likely to receive needed health services, –receive a poorer quality of health care, –are underrepresented in health research and among health care professionals, –have lower levels of education, and –are more likely to live in poverty

Persons with and without Access to Health Care, 2005 with health insurance: million people (84.3% of the population) –Employer-based health care (59.5% of the insured) –Government health insurance programs (27.3%) –Privately purchased policies (9.1%) without health insurance: 46.6 million (15.9%) Source: CPR P60-231, pp.20-25

Access to Health Care, cont. Uninsured rates (3 yr avg) in descending order: –Hispanics (32.6%) –American Indians and Alaskan Natives (29.9%) –Native Hawaiians and Other Pacific Islanders (21.8) –Blacks (19.5%) –Asians (17.7%), and –non-Hispanic Whites (11.2%).

Access to Health Care, cont. The likelihood of being insured rises with income: –Full-time workers are more likely to be insured than part-time workers or nonworkers –Children in poverty (19.0%) were more likely to be uninsured than all children (11.2%) –Children 12 to 17 years were more likely to be uninsured than those under 12

Source: Economic Report of the President, 2006, p. 85

Does the high cost of health care make families poor? How would you answer this question?

The Direction of Causality Does poverty increase the incidence of disease and result in higher mortality rates? Does poor health lead to poverty? Clearly the answers to both questions is yes. But sorting out the relative importance of poor health as a cause of poverty has proven intractable. How would you design a study to sort this out?