The Effect of Income on Mortality: Evidence from the Social Security Notch
Stephen E. Snyder and
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Stephen E. Snyder: Lehigh University
The Review of Economics and Statistics, 2006, vol. 88, issue 3, 482-495
Legislation in the 1970s created a Notch in social security payments, with those born after January 1, 1917, receiving sharply lower benefits. Using restricted-use versions of the National Mortality Detail File combined with Census data, we use this quasi experiment to examine the income mortality link in an elderly population. Estimates from difference-in-difference and regression discontinuity models show the higher-income group has a statistically significantly higher mortality rate, contradicting the previous literature. We also found that younger cohorts responded to lower incomes by increasing postretirement work effort, suggesting that moderate employment has beneficial health effects for the elderly. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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