Sudden Loss of Wealth can Shorten Your Life - Pensions May Improve Your Health Outlook
April 6, 2018
It’s been proven that income is a significant driver of health outcomes. But even if we didn’t have the evidence, the claim is self-evident.
The ability to purchase good, healthful food, live in safe housing close to services, and the ability to pay for out-of-pocket medical expenses, are just some of the factors that contribute to good health.
But two new studies show how income can have a precipitous effect on health.
The first, released last week in the Journal of the American Medical Association (JAMA) shows that sudden loss of wealth can shorten your life.
In a nationally representative survey of American adults aged 51 years or older, researchers followed 8,714 participants for an average of 17.7 years, or 80,683 person-years from 1994 to 2014.
The report found that a sudden loss of wealth over a two-year period is associated with an increase in all-cause mortality in middle-aged and older Americans. More than 25% of individuals in the study group experienced a negative wealth shock, defined as a loss of 75% or more of total net worth over two years. These individuals were found to have developed psychosocial stress that led to increased risk for depression, anxiety, suicide, and impaired cardiovascular function.
Notably, the sudden loss of wealth had similar effects regardless of initial levels of net worth. Wealth shock, then, may be a risk factor for mortality and poor health across the socio-economic spectrum. Researchers were careful to point out that serious health conditions may have contributed to the wealth loss, since out-of-pocket medical expenses can be significant in the US for the uninsured. But even still, suicide contributed immediately to the mortality differential. The stress of wealth shocks can physiologically degrade health and contribute to higher risk of mortality.
By contrast, researchers publishing in Health Affairs, assessed the effects of a large, national non-contributory pension program on the health and health care use of older people in Colombia.
Using an instrumental variables approach, researchers were able to examine the differential effects of the pension roll-out across municipalities, finding evidence that the program led to “significant but small improvements in self-reported health and reductions in hospitalizations,” especially among men.
More research is needed to fully understand the correlation between the pension and better self-reported health, but the report concludes that even a small, non-contributory pension was associated with improvements in self-reported measures of health for vulnerable older men.
In both studies, a time-constrained shift in income or wealth had notable effects on health. A sudden loss of income may be enough to increase risk of mortality, but the introduction of a small pension may be sufficient to help improve one’s health outlook.
The National Institute on Ageing (NIA) is a university-based think tank focused on leading cross-disciplinary research, thought leadership, innovative solutions, policies, and products on ageing. The NIA’s mission is to help governments, health care systems, pension plans, businesses, and Canadian families to best meet the challenges and opportunities posed to ageing Canadians and by an ageing demographic. Follow us on Twitter and sign up for our mailing list.
By Michael Nicin, Executive Director, National Institute on Ageing | Email: email@example.com