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Socioeconomic Status and Health

By August 23, 2011Commentary

In a National Bureau of Economics sponsored paper, researchers use data from the Health and Retirement Study to further the state of the art on the relationship between socioeconomic status and health.   (NBER Paper) Three possible situations are explored:  does poor health cause lower socio-economic status; does lower socio-economic status or are there other factors that cause both socioeconomic status and health to move in the same direction.  The answer has significant consequence for policymakers, but it is very difficult to experimentally or observationally design research to provide a credible solution to the causation issue.

The paper is methodologically dense, dealing with very complex statistical and model-building issues.  That discussion itself takes up many pages and gives a sense of how dangerous it is to rely on headline conclusions from any research on socioeconomic and health status relationships.  One contribution from these researchers is to show that, as is usually the case, having more data on more people helps with the analysis.  In particular, they include information on persons who were not Medicare eligible and were as young as 50.  Unfortunately, the data here is from surveys.

Even so, with the additional data,  the researchers conclude that, somewhat in contrast to prior research using the same method but less data, it is not possible to rule out a causal link from socioeconomic status to health for many medical conditions.  In fact, overall the research suggests that lower socioeconomic status may have a causative role in many medical conditions which seems consistent with common sense.  Some policymakers might wrongly conclude that the solution is to redistribute wealth to improve health.  That would ignore the question of why people have low socioeconomic status and especially whether their own behaviors create and perpetuate that status.  Our natural experiment in the United States of transferring wealth through general financial aid, housing, food stamps and free health care through Medicaid and community health centers would seem to demonstrate that trying to improve people’s financial condition has little lasting effect on socioeconomic status or health.


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