Wealth gradients in healthy aging: evidence from the 2011 and 2013 waves of the China Health and Retirement Longitudinal Study.

Abstract

Background: It is crucial to understand how individuals accumulate wealth over their lifespan and explain the relation with the changes in health by age cohort. This study examines wealth-to-health causality as an explanation for the health-wealth gradient.

Methods: Using the 2011 and 2013 waves of individuals aged 45 and above from the China Health and Retirement Longitudinal Study, this study tests for causality by employing various econometric models and statistical strategies, conducting longitudinal and cross-sectional data analyses. The validity of the causal mechanisms is assessed by comparing the fitting results from different models.

Results: The fixed effects model reveals that a 1% increase in wealth results in a statistically significant decrease in the constructed health index by approximately 0.00032 units, at a 1% significance level. Similarly, in the instrumental variables model, the coefficient for wealth is -0.229 and is also significant at the 1% level. The results for other control variables, such as demographic, socioeconomic status, geographical, and childhood health status, remain stable and align with expectations across different models.

Conclusion: This study demonstrates a causal relationship between wealth and health, with permanent income as a key determinant. It highlights the need for poverty alleviation policies that promote long-term wealth accumulation, strengthen social welfare, and consider the indirect health effects of economic and environmental reforms.