Researchers have long known that wealthy people live longer than poor people. Evidence now shows that the gap in life expectancy is widening, at least here in the United States, raising alarming questions about the fairness of current efforts to protect Social Security.
There is nothing particularly strange about the difference in life expectancy. People in poor health are at risk of dying relatively young and are limited in the type and amount of work they can do. In contrast, wealthy people can afford to live in better, safer neighborhoods, eat more nutritious food, and have access to top-notch health care. Additionally, people with higher incomes tend to have more schooling, which means they may have better information about the benefits of exercise and a good diet.
While none of the above is surprising, it is still alarming that just as income inequality is increasing, so too is longevity inequality. Over the past three decades, Americans higher up in the income distribution have enjoyed extraordinary benefits.
My Brookings colleagues and I used two large-scale surveys to calculate the average mid-career income of each family interviewed. We then estimated the statistical relationship between a respondent's age at death and her income in her 40s. We found that the gap in mortality rates between older adults at the top and bottom of the income distribution is alarmingly widening.
For example, life expectancy for a woman who turned 50 in 1970 and whose median income was in the bottom decile of earners was estimated to be about 80.4 years. Women born in the same year who were in the top 10 income earners had a life expectancy of 84.1 years. The difference in life expectancy was about three and a half years. For women who reached age 50 20 years later in 1990, they found that life expectancy for low-income people had not improved at all. However, the average life expectancy of women in the top 10 income earners increased by 6.4 years, from 84.1 years to 90.5 years. Over the past 20 years, the gap in life expectancy between women in the bottom 10 and top 10 income earners has widened from just over 3.5 years to more than 10 years.
The findings for men were similar. The gap in life expectancy between men in the bottom 10 and top 10 of the income distribution widened from 5 to 12 years over the same 20-year period.
The widening longevity gap has important implications for social security reform. Currently, the program requires too little funding to pay all promised benefits beyond 2030. A common proposal to address the funding gap is to raise the full retirement age, which is currently 66 years old. Raising the age of full benefits by one year for her has the following effects: It reduces workers' monthly checks by 6% to 7.5%, depending on their age when they first claim their pension.
For wealthy workers, cuts in benefits would be partially offset by increases in life expectancy. The number of years left to live after age 65 also increases the number of years these workers receive a pension. But workers at the bottom of the wage distribution don't live very long, so the reduction in their lifetime pensions will be about the same as the reduction in their monthly benefit checks.
Our results and those of other researchers suggest that low-income workers are not participating in the improvements in life expectancy that have contributed to Social Security's funding problems.
Therefore, it seems unfair to maintain Social Security by cutting future benefits across the board. Reforms to affordability programs should include special provisions to protect the interests of low-wage workers.
Editor's note: This article originally appeared in the Los Angeles Times.
