Mortality Inequality

Economists and other social scientists have long been interested in measures of income inequality. Most such measures are based on individual or household income at a moment in time. However, as a measure of the distribution of welfare, the typical income inequality measure leaves out an important dimension: the length of time over which an income or consumption stream is enjoyed. (See Becker, Philipson and Soares, 2004). Clearly two individuals with the same annual income or consumption but differing in longevity do not have the same total welfare. This paper is about differences in longevity. Specifically I seek to describe the historical evolution of longevity differences across individuals. This is motivated by the comparative neglect of the longevity component in the analysis of inequality. Think of an individual born today. He or she will have a lifetime welfare or utility related to total lifetime consumption (Y), which can be expressed Y CX (1) where C is some appropriately discounted measure of the individual‟s annual consumption and X is the number of years the individual lives. Using lower case to denote natural logs, (1) would be y c x (2