Inequality, both in the US and abroad, has soared over the past few generations. According to a 2014 report from the Organization for Economic Cooperation and Development, the gap between rich and poor is at its highest level in 30 years. This disparity has drawn increased attention from policymakers and academics, who have generated a vast array of literature examining both inequality and intergenerational mobility, which measures changes in socioeconomic status within the same family across generations.
Until now most of this research has focused on income, education, and occupation. A recent HCEO working paper by MIP network member Bhashkar Mazumder and his co-authors Timothy Halliday and Ashley Wong takes a different approach by focusing on health, which is increasingly being recognized as an important component of socioeconomic status.
“Economists have tended to think of human capital largely in terms of education and skills,” Mazumder says. “Now, increasingly, they are also thinking of health as a major component of human capital. So I thought it would be important to see to what extent is there intergenerational mobility in health, and is that similar to the rates of intergenerational mobility in income and other measures?”
The authors note that studying intergenerational health mobility is challenging, as it requires data on health measures for two generations of adults. They overcame this challenge by using data from the Panel Study of Income Dynamics (PSID), the world’s longest running longitudinal dataset. In 1984, the PSID began collecting information on self-reported health status. This is a health measure, used widely in epidemiology research, which has been shown to be highly predictive of mortality. Using this information, the authors “construct an intergenerational sample of parents and their adult children.”
“We’re essentially able to take families, where we know income in both generations, health in both generations, and line up mobility according to both measures as best we can,” Mazumder explains.
The authors then employ this data to convert the self-reported health status into a measure similar to the “quality adjusted life year,” which is an economic evaluation commonly used to report the value of medical interventions. This measure is used as a proxy for lifetime health status. Overall, Mazumder and his co-authors find that there is substantially greater health mobility than income mobility in the US. In addition, they find that families that experience mobility in health are not necessarily the same families that experience mobility in income.
“This suggests that they are in some ways a different dimension of socioeconomic success,” Mazumder says. “It could be that while there’s a lot of factors in American society that, for whatever reason, makes it difficult to escape the conditions you were born in with respect to how much money you’ll make, it seems quite a bit different when it comes to your health as an adult.”
The authors were interested in exploring what might be driving these differences in health and income mobility. They hypothesized that social institutions and policies may be more successful at breaking the intergenerational link in health than they are in income. For example, modern public health infrastructure such as access to clean air and water, and social safety net programs like SNAP and Medicaid, might have played a part in reducing the transmission of health status across generations. “In contrast, it may well be that opportunities for labor market success, which are rooted in educational opportunities earlier in life, may be much more unequal and hence, lead to greater intergenerational income persistence,” the authors write. “It may also be the case that in the past, the rates of income persistence and health persistence were more similar, but in recent decades, as the labor market returns to schooling has risen and as income inequality has increased, intergenerational income persistence has also increased.”
One mechanism in particular that the researchers studied was whether access to health insurance might play a role in reducing the intergenerational transmission of health status. To do this, they used PSID data on health insurance coverage for household members, controlling for family income and parent education. They find that “there is greater persistence in health status among families where parents did not have health insurance.”
“This provides suggestive evidence that health insurance might be part of what breaks the link across generations in health,” Mazumder says.
The study also examines variation in health mobility by region, race, and parent education level. The findings for these subgroups largely follow trends in income mobility, although they are less pronounced. The authors note that people who grew up in the South experience both lower upward mobility and higher downward mobility. They also find that black people “experience significantly less upward mobility and significantly higher downward mobility than whites,” although they point out that the “racial mobility gap in health is smaller than the analogous racial mobility gaps in income.” The paper also finds that children of less educated parents are “similarly disadvantaged when it comes to health as compared to children of well-educated parents.”
The authors also explore how early life circumstances affect health mobility. They conclude that close to 40 percent of intergenerational health persistence can be explained by early childhood circumstances. “Interestingly, the socioeconomic background of the parents appears to matter more than the child’s health status in explaining the transmission of health status across generations,” the paper notes.
Given the persistence of social immobility in the US, understanding the mechanisms behind it are crucial. With this paper, Mazumder and his co-authors help to fill the void in our understanding by providing the first estimates of intergenerational health mobility in the US. Health is not only an important indicator of well-being, as the authors note, it also plays a vital role in success over the life course.