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Earnings Growth versus Measures of Income and Education for Predicting Mortality

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Abstract

This paper begins an exploration to determine whether earnings growth, as a measure of the propensity to invest in human capital, is a valuable variable for predicting mortality. To insure its robustness and general applicability to ongoing Social Security models, the usefulness of earnings growth as a predictor of mortality will be explored in multiple time periods. This paper begins that process by reporting preliminary results for an early time period using the 1973 CPS-SSA-IRS Exact Match file. In addition to presenting preliminary results, the paper also describes how data challenges associated with the pre-1978 administrative record data on earnings and mortality are met.

Key Findings

  • Earnings growth, measured over the entire career of individuals, appears to supersede income’s effect as a predictor of mortality.
  • Both education and earnings growth are useful for predicting mortality.
  • Earnings growth measured at the beginning of the working career appears to be a viable predictor of subsequent mortality.
  • The final result is of particular use in forecasting models that rely only on Social Security’s administrative record data since the administrative record data lack information on years of schooling.

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Project

Paper ID

WP 2011-257

Publication Type

Working Paper

Publication Year

2011