Healthy , Wealthy , and Wise ?

This paper utilizes the Asset and Health Dynamics of the Oldest Old (AHEAD) Panel to test for the absence of causal links from socio-economic status (SES) to innovations in health or mortality, and from health conditions to innovations in wealth. We conclude that there is no causal link from SES to mortality or to incidence of sudden onset health conditions (accidents and, probably, acute conditions), but there is an association of SES with incidence of gradual onset health conditions (mental conditions, and, probably, degenerative and chronic conditions), due either to causal links or to persistent unobserved behavioral or genetic factors that have a common influence on both SES and innovations in health. We conclude that there is no causal link from health status to innovations in wealth. We gratefully acknowledge financial support from the National Institute on Aging through a grant to the NBER Program Project on the Economics of Aging. Peter Adams has provided research assistance. * Corresponding Author: Department of Economics, University of California, Berkeley CA 94720-3880, or [email protected]. Backlund, Sorlie, and Johnson, 1999; Bosma et al,, 1997; Chandola, 1998,2000; Drever and Whitehead, 1997; Ecob and Smith (1999; Elo and Preston, 1996; Feinstein, 1992; Fitzpatrick et al, 1997; Fitzpatrick and Dollamore, 1999; Fox and Goldblatt, 1982; Goldblatt, 1990; Hayes, 1991; Hurd, 1987; Hurd and Wise, 1989; Karasek et al, 1988; Kitagawa and Hauser, 1973; Lewis et all, 1998; Marmot et al, 1997; Leigh and Dhir, 1997; Luft, 1978; Martin and Preston, 1994; Martin and Soldo, 1997; Rogers, 1991; Schnall, Landsbergis, and Baker, 1994; Shorrocks, 1975; Stern, 1983; Whitehead, 1988; Woodward et al, 1992. Specifically, our variables are indicators for the lowest and highest wealth quartiles and the lowest and highest incomequartiles (with the intermediate quartiles omitted), indicators for the completion of high school and college, and indicatorsfor self-reported poor or fair neighborhood and dwelling conditions (other conditions omitted). Wealth in our study ismeasured by accumulating over self-reported holdings in nine asset categories. 1Healthy, Wealthy, and Wise?New Evidence from AHEAD Wave 3 Michael Hurd, Daniel McFadden, Angela Merrill, and Tiago RibeiroMay 2001