Wednesday, February 13, 2008

Does poverty kill?

People die earlier the poorer they are (at least in part). This is the finding from a new NBER paper Aging and Death under a Dollar a Day, as reported on by VoxEUon panel data from Vietnam and Indonesia.

From VoxEU:

...the largest difference in mortality rates across incomes is consistently found in cohorts of old people. For example, in 1992-93, an Indonesian or Vietnamese aged 50 year-old or more faced a 15% probability of dying within 5 years if he lived in an extremely poor rural household compared to just a 3% to 5% chance if he lived in a rural household with a daily per capita expenditure of $6 to $10.

The causal relationships are more complex to understand: Does ill health reduce people’s ability to work and thus lower incomes, or is it low incomes that lead to ill health and early death?

The NBER paper further concludes:
The direction of causality is unclear: the poor may be poor because they are sick (and thus more likely to die), or they could die because they are poor.

Whatever the case, there is no joy in being stuck in the bottom billion.

In Africa alone that means 41% of the population living on less then $1 per day.

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