The Rich Live Longer: A Model of Income and Health Inequalities

Pablo Garcia-Sanchez;Olivier Pierrard
(2025) , 41 pages

Files

2025016.pdf
  • Open Access
  • Adobe PDF
  • 1.22 MB
Download

Details

Authors
  • Pablo Garcia-SanchezBanque centrale du Luxembourg, Departement Economie et Recherche
    Author
  • Olivier PierrardUCLouvain
    Author
Abstract
Income and life expectancy are strongly correlated, yet the mechanisms underlying this relationship remain debated. This paper develops a structural model in which both variables are endogenous and jointly determined. Calibrated to U.S. data, the model replicates the income-longevity gradient and the distribution of age at death. It highlights the importance of both the health-to-income and income-to-health channels in accounting for these empirical patterns. Our model also offers a more cautious assessment of income redistribution policies than empirical studies, showing that redistribution can weaken incentives for preventive care and increase mortality risk. By contrast, lowering the price of preventive care through subsidies promotes better health and longer lives.
Affiliations

Citations

  • APA
  • Chicago
  • FWB

Pablo Garcia-Sanchez, & Olivier Pierrard. (2025). The Rich Live Longer: A Model of Income and Health Inequalities (LIDAM Discussion Paper IRES/2025/16). https://hdl.handle.net/2078.5/260738