How Much Cohort Inequality can be Explained by Socio-Economic Status-Based Mortality Differences?

Abstract

Several studies have found mortality differences by income level — higher income individuals tend to live longer — and these differences have been growing over time. This differential mortality could affect measured cohort income inequality because the bottom of the income distribution will become relatively sparse as a cohort ages. This study examines the role played by differential mortality in the course of cohort income inequality as a cohort ages from the late preretirement years to old-age. The results show that differential mortality explains little of cohort income inequality and little of the changes in income inequality. Mortality bias does not appear to effect cohort inequality trends.

Keywords: differential mortality, income inequality, retirement

JEL Classification: D30, D63