“We Find It Hard To Sustain The Income-Based Explanation”

Recently, I posted about Jack Healy’s excellent New York Times article about the Winemiller farming family in Ohio’s Clermont County, which boasts a low 4.1% unemployment rate. The parents have already lost two of three adult children to heroin overdoses, with the third one battling to beat the same poison. The father is a staunch Trump supporter, drawn by his tough-on-crime talk, hoping someone, anyone, can capture and kill the demons that has run over his life. The faith is misplaced, but grief can sometimes harden into vengeance.

Such demises can be categorized in Case-Deaton terms as “deaths of despair.” The husband-and-wife economists offered, in 2015, a shocking report about the sharp spike in mortality for white, middle-aged Americans, especially those who possess a high-school-or-less education. The epidemic seems driven by suicide, alcohol, opioids and obesity, self-destructive behaviors associated with hopelessness, dysfunction and poor childhood training. Deaton even compared the findings to the scourge of AIDS. The paper was published, appropriately, on December 8, the anniversary of Pearl Harbor.

Economics is certainly partly to blame for the steep decline of those in this demographic, though the full picture is far more complicated. In a follow-up paper, the economists write that the “story is rooted in the labor market, but involves many aspects of life, including health in childhood, marriage, child rearing, and religion.” The duo stresses the importance of dealing with the opioid problem but promise no quick fix for what’s a deeply entrenched disaster. Somehow we need to break free from our often-myopic politics to address these troubles, staying the course over long term. As Case and Deaton write: “The epidemic will not be easily or quickly reversed by policy.”

An excerpt: 

Taking all of the evidence together, we find it hard to sustain the income-based explanation. For white non-Hispanics, the story can be told, especially for those aged 50–54, and for the difference between them and the elderly, but we are left with no explanation for why Blacks and Hispanics are doing so well, nor for the divergence in mortality between college and high-school graduates, whose mortality rates are not just diverging, but going in opposite directions. Nor does the European experience provide support, because the mortality trends show no signs of the Great Recession in spite of its marked effects on household median incomes in some countries but not in others.

It is possible that it is not the last 20 years that matters, but rather that the long-run stagnation in wages and in incomes has bred a sense of hopelessness. But Figure 2.4 shows that, even if we go back to the late 1960s, the ethnic and racial patterns of median family incomes are similar for whites, blacks, and Hispanics, and so can provide no basis for their sharply different mortality outcomes after 1998.

There is a microeconomic literature on health determinants that shows that those with higher incomes have lower mortality rates and higher life expectancy, see National Academy of Sciences (2015) and Chetty et al (2016) for a recent large-scale study for the US. Income is correlated with many other relevant outcomes, particularly education, though there are careful studies, such as Elo and Preston (1996), that find separately protective effects of income and education, even when both are allowed for together with controls for age, geography, and ethnicity. These studies attempt to control for the obviously  important reverse effect of health on income by excluding those who are not in the labor force due to long-term physical or mental illness, or by not using income in the period(s) prior to death. Even so, there are likely also effects that are not eliminated in this way, for example, that operate through insults in childhood that impair both adult earnings and adult health. Nevertheless, it seems likely that income is protective of health, at least to some extent, even if it is overstated in the literature that does not allow for other factors.•

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