Income Inequality and Later Life Health and Mortality: Estimating Life-Course Treatment Effects

Dean R. Lillard, Cornell University

Discussions of income inequality often assert that people suffer worse health if they live in societies with greater and persistent income inequality. The claims are typically founded on weak evidence. I investigate this claim with a broader the set of outcomes that includes mortality and specific health outcomes (e.g. hypertension). In contrast to much of the literature, I use longitudinal data from the Panel Study of Income Dynamics (PSID). With an algorithm developed elsewhere, I map to each individual, the income inequality (measured at the state level) that he experienced in each year of his whole life. The empirical analysis then investigates whether average income inequality (measured alternatively by the Gini coefficient or the 80/20 income ratio) predicts negative outcomes at some later age. Results show that when a person experiences income inequality in particular portions of life, he is more likely to die earlier and suffers worse health.